The Factors Hindering the Complementary Effect of Industry-Public R&D Collaboration on Regional Innovation : Using an Orthogonalisation Method for Interaction Terms

This paper concentrates on the factors hindering the complementary effect of R&D collaboration between industry and the public sector on Greek regional innovation over the period from 2008 to 2017. Specifically, it will attempt to identify the key channels that may mitigate the impact of industry-public collaboration on regional innovation. The present research first finds that R&D spillovers have a positive and significant impact on regional patent intensity. Using a sophisticated orthogonalisation method for interaction terms in order to ‘clean’ each variable of interest from other highly collinear variables for dealing with multicollinearity concerns, the R&D collaboration between industry and the public sector leads to an insignificant effect on regional innovation. Regarding the individual components of interaction, public R&D (higher education and government) and industrial R&D (business enterprise sector and high-tech industrial employment shares) have both positive and insignificant influences on regional innovation