Industry-university collaboration and absorptive capacity: An empirical study in a Swedish context

Abstract

In this paper, we examine the role of firms' absorptive capacity in industry-university collaboration and, in particular, whether absorptive capacity moderates the effects of university collaboration on firms' innovativeness. Having defined absorptive capacity as the recognition, assimilation and application of valuable external knowledge for commercial purposes, we formulated three hypotheses pertaining to firm innovativeness and tested them in an original survey comprising a representative multi-industry sample of 1,532 Swedish firms. The results suggest that benefiting from university cooperation is conditional upon the firm's level of absorptive capacity. At low levels of absorptive capacity, engaging with universities does not translate into any noticeable increase in innovative output. In contrast, medium to high levels of absorptive capacity is where a firm benefit most from collaborating with a university. We also show that these effects are more pronounced for firms operating in sectors characterised by lower levels of technology and knowledge intensity.