Regional technological diversification and the global network of embodied R&D: evidence from the exposure of European regions

We investigate whether regions' participation to the global network of embodied R&D (GNRD) facilitates their technological diversification. Filling a gap about the role of global research and development (R&D) networks, we maintain that by patenting in pivotal GNRD industries, regions become more exposed to global knowledge and increase their capacity to diversify also in technologies less cognitively related to pre-existing ones. Using novel GNRD data, we test this using a panel (2004-19) of NUTS-2 regions for the EU-13. GNRD regional exposure positively correlates with technological diversification, mainly at the intensive margin. A higher exposure makes technological diversification less related to existing technologies, though the relationship is non-linear.