Scandinavian Working Papers in Economics

Working Paper Series in Economics and Institutions of Innovation,
Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies

No 188: How do Organisational and Cognitive Distances Shape Firms’ Interactions with Universities and Public Research Institutes?

Anders Broström () and Maureen McKelvey
Additional contact information
Anders Broström: CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology, Postal: CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology, SE-100 44 Stockholm, Sweden
Maureen McKelvey: RIDE and Institute of Innovation and Entrepreneurship

Abstract: This paper examines how the institutional set-up of public research organisations (PROs) affects how firms are able to utilise direct interaction with publicly employed researchers. We argue that the role that PRO interaction has to play in the firm’s innovation processes depend on the organisational and cognitive distances between the firm and the PRO. In particular, this paper empirically explores how Swedish engineering firms assess the value of R&D partnerships with universities and research institutes. Our theoretical discussion of organizational distance suggests that managers should perceive institute contacts to be more strongly associated with short-term R&D projects than university contacts. This hypothesis cannot be verified. Following from our discussion of cognitive distance, we find that firms with advanced R&D capabilities obtain differential benefits. Their interaction with universities provides impulses for innovation and offers opportunities to learn to a greater extent than contacts with public research institutes. However, firms with less advanced R&D capabilities perceive no significant differences between university and institute interaction. Thus, both organizational and cognitive distance affect firms’ interactions with PROs, and our results have implications for the current push in Europe to reform universities and institutes.

Keywords: public research organisations; organisation of public research; universities; institutes; R&D interaction

JEL-codes: M21; O31; O32

25 pages, August 26, 2009

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