The potential improvements in spatial resolution of neonatal EEG used in source localization have been challenged by the insufficiencies in realistic neonatal head models. Our present study aimed at using empirical methods to indirectly estimate skull conductivity; the model parameter that is known to significantly affect the behavior of newborn scalp EEG and cause it to be markedly different from that of an adult. To this end, we used 64 channel EEG recordings to study the spatial specificity of scalp EEG by assessing the spatial decays in focal transients using both amplitudes and between-c'hannels linear correlations. The findings showed that these amplitudes and correlations decay within few centimeters from the reference channel/electrode, and that the nature of the decay is independent of the scalp area. This decay in newborn infants was found to be approximately three times faster than the corresponding decay in adult EEG analyzed from a set of 256 channel recordings. We then generated realistic head models using both finite and boundary element methods along with a manually segmented magnetic resonance images to study the spatial decays of scalp potentials produced by single dipole in the cortex. By comparing the spatial decays due to real and simulated EEG for different skull conductivities (from 0.003 to 0.3. S/m), we showed that a close match between the empirical and simulated decays was obtained when the selected skull conductivity for newborn was around 0.06-0.2. S/m. This is over an order of magnitude higher than the currently used values in adult head modeling. The results also showed that the neonatal scalp EEG is less smeared than that of an adult and this characteristic is the same across the entire scalp, including the fontanel region. These results indicate that a focal cortical activity is generally only registered by electrodes within few centimeters from the source. Hence, the conventional 10 to 20 channel neonatal EEG acquisition systems give a significantly spatially under sampled scalp EEG and may, consequently, give distorted pictures of focal brain activities. Such spatial specificity can only be reconciled by appreciating the anatomy of the neonatal head, especially the still unossified skull structure that needs to be modeled with higher conductivities than conventionally used in the adults. © 2014 Elsevier Inc.