Innovation,a neglected locational factor

The regional variation in the sales of a new product, a corrugated zink plate for roofing, is described and explained with the help of regression analysis covering a four year period following the product's introduction. Distance from the plant, share of rural population, income per capita, intensity of competition and a regional dummy explain 76–90 % of the regional variation in a year. As the product commands a practically uniform price and has identical availability irrespective of customer location, and as official marketing information is centralized and therefore also uniform, the distance and dummy variables should not appear in the regression equation. Their actual appearance and the positive sign of the competition-variable are explained by the spatial innovation effect. Its significance is evaluated and measures are suggested for its exploitation.