Based on the Knowledge Production Function framework given byGriliches (1979), we slightly modify it so that the innovative output depends upon aset of factors related to the firm internal characteristics and are influenced by the environment.Specifically, regarding the firm internal determinants the effect of the concentrationof the ownership, the composition of the boards of directors and the effectof the nature of the ownership (foreign and public) are analyzed. Additionally, in orderto capture the determinants of the environment in which the firm operates other variablesconcerning the internationalization of market, the agglomeration economies andthe regional knowledge externalities are also considered. In order to assess the impactof these determinants on the number of patents and models of use awarded by thefirm, the discreteness of the latter variable has to be taken into account. We apply Poissonand Negative Binomial models for a more comprehensive evaluation of the hypothesisin a panel of Spanish manufacturing firms. The results show patenting activity ispositively favoured by being located in an environment with a high innovative activity,due to the existence of knowledge spillovers and agglomeration economies.