Determinants of Strategic Partnerships in R&D - a Regional Comparison Among the German Federal States

This paper investigates R&D partnerships among companies in the German manufacturing industry. Companies work together in R&D partnerships and put forward joint research efforts, but do not give up their economic independence. The question is why companies engage in R&D partnerships and under what circumstances these partnerships are more or less successful. We analyze these questions empirically and put special emphasis on possible contributions of R&D partnerships to diminish regional disadvantages of Eastern German companies. The data were collected in 2001 and cover 886 companies in the manufacturing and industry-related service sectors. Firstly, it can be shown that there are no significant differences in the probability of the participations of Eastern and Western German companies. Secondly, we find that companies participate in R&D partnerships not to substitute for their own R&D activities but to pool resources. Companies that are involved in R&D partnerships are more innovative than others and the R&D partnerships help the the companies to stay competitive, i.e. to produce a more modern range of products and services. Thirdly, we find a particularly important role of universities in R&D partnerships of East Germany companies, which is partly due to governmental subsidies which were obviously efficient in the sense that they increased these particular types of public-private-partnerships. However, it remains to be seen whether they survive without governmental subsidies