The Location of Industry R&D and the Location of University R&D - How are They related?

During the years, a large number of formal studies have presented evidences of a positive impact of university R&D on firm performance in general and on the location of industrial R&D, in particular. The question is does it also work the other way around? Does industrial R&D function as an attractor for university R&D? What are the behavioural relationships between industrial R&D and university R&D and vice versa? The fact that knowledge flows seem to be spatially bounded implies that proximity matters for the relationships between industrial and university R&D. We argue that spatial proximity should be measured using accessibility measures. Furthermore, accessibility measures can be used to model interaction opportunities at different spatial scales: local, intra-regional and inter-regional. Against this background, the purpose of this paper is to analyse the locational relationship between industry R&D and university R&D in Sweden using a simultaneous equation approach. Our results indicate that the location of industrial R&D is quite sensitive to the location of university R&D, and that the location of university R&D is sensitive to the location of industrial R&D. However, the latter result is achieved only when we take away one outlier in the data.