Disentangling regional innovation capability: what really matters?

Where does innovation come from? And do all regions innovate similarly? We deal with these questions by highlighting the complexity of concepts capability and performance, testing their association at European Union regional level. disentangle inputs capability, consider heterogeneity in institutional quality, to understand relative endowment what is associated higher performance. find that ‘formal’ – public business R&D expenditure not work unconditionally everywhere, less ones e.g., non-R&D firms collaborating for matter particularly low-quality institutions. Moreover, quality emerges as an productivity-enhancing factor.