The importance of geographical distance to different types of R&D collaboration in the pharmaceutical industry

Abstract

Innovation within companies is generated by a combination of different types of knowledge from external and geographically dispersed sources. Although the geographical dimension of collaboration has previously been investigated, studies have not distinguished between different types of knowledge involved in collaboration. This article analyses how the number of collaborations between pharmaceutical multinational companies (MNCs) and external organizations is affected by geographical distance, distinguishing between four knowledge types: basic science, clinical science, core knowledge, and exploration knowledge. We use co-publications as a proxy for collaborations. Our results show that collaborations in basic science and core knowledge areas are more negatively affected by geographical distance than collaborations within clinical science and exploration knowledge areas. This suggests that the importance of geographic proximity depends on the type of knowledge that is being transferred in R&D collaborations. Our results have implications for companies´ collaboration strategies and their choices for the R&D sites´ location.