This paper examines the impact of research externalities on innovation across European regions, using R&D and patent data from 86 European regions over the period 1977-1995. The authors find that spillovers exist for regions within a 300 km radius, but are small in magnitude. Doubling R&D spending in one region increases its own patenting output by 80-90%, but only increases the output of other regions within 300 km by 2-3%. These spillovers are interpreted as the result of local diffusion of non-codified knowledge, which spreads through personal contacts. The study also finds that spillovers are weaker across national borders. The paper discusses the methodology, data sources, and empirical results, including the robustness of the findings to different specifications and controls.This paper examines the impact of research externalities on innovation across European regions, using R&D and patent data from 86 European regions over the period 1977-1995. The authors find that spillovers exist for regions within a 300 km radius, but are small in magnitude. Doubling R&D spending in one region increases its own patenting output by 80-90%, but only increases the output of other regions within 300 km by 2-3%. These spillovers are interpreted as the result of local diffusion of non-codified knowledge, which spreads through personal contacts. The study also finds that spillovers are weaker across national borders. The paper discusses the methodology, data sources, and empirical results, including the robustness of the findings to different specifications and controls.