This paper contributes to the analysis of the process of spatial agglomeration of innovative activities by investigating directly its determinants. Our main purpose is to identify the extent to which the degree of specialization or diversity in a region may affect the innovative activities in a particular local industry. Other local factors are also tested such as home market effect and other agglomeration phenomena. In other words, we pursue to identify to which extent the organization of innovation is either concentrated or alternatively consists of diverse but complementary innovative activities, and how this composition influences innovative output. Moreover the use of spatial econometric techniques should allow the nature other than the spatial scope of the diffusion of technological spillovers to be analysed. The analysis is based on a databank set up by CRENoS on regional patenting at the European Patent Office classified by ISIC sectors (23 manufacturing sectors), which considers 175 regions of 17 countries in Europe. The possibility to have a rich database, furthermore, allows replicating the analysis for two periods, 1994–1996 and 1999–2001, in order to check the robustness of some results along the time dimension.