The purpose of this study is to explore the factors that allow firms to benefit from knowledge developed inuniversities and government labs or that drive them to collaborate with these institutions. A number ofstudies have examined this question from various perspectives: the characteristics of the knowledge beingtransferred, the complementarity between the assets of the two parties involved in the collaboration, and theorganizational aspects facilitating collaboration and knowledge transfer between firms anduniversities/research labs. Santoro and Gopalakrishnan (2000) review this literature and examine inparticular the organizational dimension of industry-university collaborations. Hall, Link and Scott (2000)conclude from their analysis of partnerships in the U.S. Advanced Technology Program that universitiesare invited to collaborate with industry (as a contractor or as a research partner) in projects that involve newscience, unknown technological territory. We shall focus on the economic determinants of collaborationand knowledge-sourcing from universities and government labs, factors such as size, group membership,degree of innovativeness, growth and government support.Universities and government laboratories are more than private firms heavily involved in basic R&Dbecause it has the character of a public good. Many studies, starting with Mansfield (1980), estimate a highrate of return on basic R&D. Adams (1990) estimates high spillover effects from academic R&D. Jaffe(1989) and Acs, Audretsch and Feldman (1992) even find that the geographical proximity to universitiesincreases innovation, be it measured by the degree of patenting or by the number of new productsintroduced in the market. Henderson, Jaffe and Trajtenberg (1998) find that university patents are moreimportant (cited over a few generations of citations) and more general (cited in a broad range of fields) thanthe average patent. There is thus a fair amount of empirical evidence showing that academic institutionsproduce substantial R&D spillovers.Firms should therefore be interested in forging links, perhaps even in collaborating with universities orgovernment laboratories in order to capture timely new technological opportunities stemming from basicresearch. Indeed, proximity to basic science is reported by Cohen (1995) to be one of the main determinantsof innovation. Governments in their quest to maximize the social return of innovation should also beconcerned with fostering such links between private firms and basic research institutions. Not all firms,though, are ready to seek such links and to be able to benefit from them. It would be interesting to knowwhat profile of firm it takes, for instance size, group affiliation, or the presence of research activities, toseek close contacts and collaborate with centers of basic research. Knowing that, governments could focustheir attention to this type of firms to maximize the efficiency in the allocation of public R&D money.The CIS2 (the second European Community Innovation Surveys) database contains two types ofinformation regarding industry links with universities and government labs. One is about the role ofuniversities or government labs as sources of information for innovation, and the other is aboutcollaboration with universities or government labs. Given the other information about enterprises that iscontained in the innovation surveys, we try to uncover some of the factors that encourage firms to interactwith universities or government labs.
