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The present paper studies the determinants of regional innovation in Europe through a knowledge production function approach that combines factorial analysis and regression. Our dependent variable are the patents while we used initially 21 explanatory variables that were converted—by a factor analysis—into five non-observable “hypothetical” variables reflecting five important aspects of the innovation systems: the National environment, the Regional environment, Innovating firms, Universities and the R&D done by Public Administration. Our results show that all factors have a statistically significant effect on the production of knowledge (patents), although they present very different impacts.

This study is concerned with the examination of the configuration of the innovatory process of a very significant group of firms located in the Madrid region. The analytical perspective has its basis on the existence of a wide variety of possibilities in the innovation process and is linked to the recent tradition of evolutionary theories of technological change. The empirical research starts by identifying the firms which can be classified as innovatory; the analysis, basically made from the findings of a questionnaire sent to these firms, contains three basic elements: first, a study of the main structural characteristics of the firms; second, an analysis of the way in which technological activities are developed in those firms; and, third, a taxonomy of cases following the concept of ‘technological regimes’.

The aim of the present paper consists of providing empirical evidence for the debate on the role of multinational companies in the creation of technological capabilities within the new international competitive framework. The research carried out with more than 110 German industrial subsidiaries operating in Spain allows the authors to analyse a great variety of aspects of their technological behaviour. With the addition of the information coming from German parent companies, a taxonomy of the strategies followed by those firms has been developed.