Graduate hiring as a human capital outcome of university-industry innovation collaboration

Firms can strengthen their competitive position in the knowledge-based economy by collaborating with universities on innovation. Beyond generating knowledge, such collaborations can also offer a strategic approach for firms to access and recruit highly skilled talent, particularly university graduates. This study explores the impact of university-industry innovation collaborations on firms’ hiring of university graduates. Using genetic matching – a robust, algorithm-driven matching method that optimises covariate balance – on data from the Danish Community Innovation Survey and longitudinal firm-level employment microdata, the study constructs a counterfactual to assess how university collaborations influence the hiring of high-skilled labour. The results show that firms involved in university-industry collaborations increase their recruitment of graduates, particularly those from their university partners and among PhD graduates. These findings highlight that collaborating with a university not only supports knowledge transfer but also reshapes firms’ workforce composition, supports building absorptive capacity and fostering long-term innovation capabilities.