Small and medium-sized firms (SMEs) are increasingly regarded as engines of innovative activity, especially in some of the most dynamic local areas in Western Europe. However, most SMEs lack the adequate resources to conduct research and development (R&D), which is traditionally considered as the main source of innovation. This apparent contradiction has induced several researchers to try to answer the question of where SMEs get their knowledge inputs. This literature, which has tended to use patents as a proxy for public research, has found that SMEs are particularly sensitive to spillovers from university and public research. In this paper the authors readdress this question by using a bibliometric indicator of public research output, instead of patents, for 100 Italian provinces during the 1990s. The results highlight that there is a strong geographical connection between the territorial concentration of SMEs and public research and that this connection is sensitive to firm size.
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