Factors Affecting University–Industry R&D Collaboration : The importance of screening and signalling.

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 mediumsized enterprises. 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 how many collaborative projects a firm has had with PROs. This allows us to study the determinants of firms’ collaboration with PROs in terms of both the propensity of a firm to cooperate with a university (do they cooperate or not) and the extent of this cooperation (the number of collaborations). Two questions are addressed. Which firms cooperated with PROs? And what are the firm characteristics that might explain the number of collaborations 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 cooperations 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 level of collaboration developed. In fact, firms that outsource research and development (R&D), and patent to protect innovation and to signal competencies show higher levels of collaboration.