Elsevier

Research Policy

Volume 35, Issue 2, March 2006, Pages 309-323
Research Policy

Factors affecting university–industry R&D projects: The importance of searching, screening and signalling

https://doi.org/10.1016/j.respol.2005.12.001Get rights and content

Abstract

This paper presents an empirical analysis of the determinants of research cooperation between firms and Public research organisations (PROs) for a sample of innovating small and medium-sized enterprises (SMEs). The econometric analysis is based on the results of the KNOW survey carried out in seven EU countries during 2000. In contrast to earlier works that provide information about the importance of PROs’ research, we know the number of firm/PRO collaborative research and development (R&D) projects. This allows us to study the determinants of firm collaboration with PROs in terms of both the propensity of a firm to undertake R&D projects with a university (do they cooperate or not) and the extent of this collaboration (number of R&D projects). Two questions are addressed. Which firms cooperated with PROs? And what are the firm characteristics that might explain the number of R&D projects with PROs? The results of our analysis point to two major phenomena. First, the propensity to forge an agreement with an academic partner depends on the ‘absolute size’ of the industrial partner. Second the openness of firms to the external environment, as measured by their willingness to search, screen and signal, significantly affects the development of R&D projects with PROs. Our findings suggest that acquiring knowledge through the screening of publications and involvement in public policies positively affects the probability of signing an agreement with a PRO, but not the number of R&D projects developed. In fact, firms that outsource research and development, and patent to protect innovation and to signal competencies show higher levels of collaboration.

Introduction

Since the 1980s, many countries have implemented policies to promote and sustain university–industry partnerships. In the light of this phenomenon, an increasing number of academic contributions have attempted to understand, explain, and justify these interactions in economic terms. In Europe, university–industry relationships have been analysed mainly from a qualitative point of view or by relying on case studies of single universities.1 Very few contributions have been supported by systematic data analysis. Some country-specific data have been gathered and analysed: Meyer-Krahmer and Schmoch (1998) and Beise and Stahl (1999) provide interesting evidence of the contribution of public research to industrial innovation in Germany. At the European level, apart from the PACE (Policies, Appropriability and Competitiveness for European Enterprises)2 questionnaire and the three Community Innovation Surveys (CIS),3 there are few databases that facilitate analysis of the links between universities and firms taking into account firm, sector and country effects.

The aim of this paper is to develop an original quantitative analysis of the determinants of firms’ participation in research and development (R&D) projects with public research organisations (PROs are defined here as universities and other public research centres). Our analysis provides preliminary evidence of the characteristics that affect firms’ involvement with PROs in R&D projects, controlling for country and sector fixed effects.4 We use the results of the 2000 KNOW survey covering seven EU countries, including the four largest. The survey was limited to five sectors: food and beverages, chemicals (excluding pharmaceuticals), communications equipment, telecommunications services and computer services, and focused on small and medium-sized enterprises (SMEs) employing a minimum of 10 and a maximum of 999.

The econometric estimations are based on direct measurement of the extent of cooperation between firms and PROs. Unlike previous studies we have information on the number of R&D projects conducted jointly with PROs in the 3 years before the survey (1997–2000). This direct measure of university–industry interaction allows us to assess the factors that affect: (a) the probability of a firm developing cooperation with a PRO and (b) the number of R&D projects developed by the firm in the previous 3 years. Specifically, we address two main questions. Which firms established partnerships with PROs during the 3 years before the questionnaire? What are the particular characteristics that might explain the number of their R&D projects with PROs?

Particular attention is devoted to the idea that the openness of the firm to the external environment has an important effect on the development of collaboration with PROs. Openness refers here to the broad set of activities that firms can conduct to acquire knowledge from, voluntarily disclose knowledge to and/or exchange knowledge with the external world. These activities include searching, screening and signalling and can be carried out in different ways. It is important to account for these activities in order to understand whether their impact on both the propensity and the extent of collaboration is similar. In addition to openness we analysed the influence of other variables on firms’ collaborations with PROs. Among these control factors we tested for firm size, firms’ R&D activity, firms’ innovative activity and firms’ tendency to outsource R&D.

The paper is organised as follows. Section 2 briefly reviews the literature on university–industry R&D cooperation. Section 3 discusses the information collected in the KNOW survey and in-depth interviews, relevant to the understanding of university–industry links. The propensity for and extent of engaging in R&D projects are examined in Section 4 using an econometric model. Finally, Section 5 summarises the main results of the analysis.

Section snippets

University–industry relationships

The extensive literature on university–industry relationships is mainly empirical and based on case studies, patent and bibliometric analyses, or large surveys. One part of the literature highlights the positive impacts of scientific results on the economic sphere. Without academic research outcomes many innovations could not have been realised or would have come much later (Mansfield, 1991, Beise and Stahl, 1999). Scientific results brought about increased sales and higher research

Firm-PRO cooperation: evidence from the KNOW survey and in-depth interviews

The empirical analysis presented in this paper is based on the results of the KNOW survey and on 70 in-depth interviews carried out in 2000.7

Modelling PRO-firm collaboration

Direct measurement of the extent of collaboration between firms and PROs is unique to the KNOW survey. In contrast to earlier work, which produced information about the importance of PRO research, here we study the determinants of firms’ collaboration with PROs in terms of both the propensity for a firm to cooperate with a university (do they cooperate or not) and the extent of this cooperation (the number of R&D projects). We are able to do this because we have information about how many R&D

Conclusions

The KNOW questionnaire provides a unique data set for the researcher to analyse the innovation processes of SMEs with less than 999 employees. This paper looked at the characteristics of the firms that developed R&D projects with PROs taking into account sector and country fixed effects. One of the main contributions of this analysis is to characterise firms through the activities used to manage internal and external knowledge. Firms that actively screen their environment and voluntarily

Acknowledgements

The authors would like to acknowledge the contribution offered by the long discussions with Keith Pavitt and Ed Steinmueller on issues of relevance to this paper. They also would like to thank Anthony Arundel, Gustavo Crespi, Lionel Nesta, Arvids Ziedonis. We are indebted to one anonymous referee whose comments and suggestions have significantly improved the quality of the paper. Usual disclaimers apply. Earlier versions of this paper were presented at the Schumpeter Society Conference 2004

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