The Further the Better? Knowledge Intensive Service Firms' Collaboration on Innovation

Three hypotheses in relation to knowledge intensive service firms’ collaboration in relation to development of new services are explored: i) firms with a high level of absorptive capacity are more likely to collaborate on innovation than firms with a relatively low level of absorptive capacity; ii) given that the firms collaborate on innovation, the main innovation partner of knowledge intensive service firms with a high level of absorptive capacity is likely to be located further away than the main innovation partner of firms with a low level of absorptive capacity; and iii) collaboration with distant partners in the innovation process will often be of a more explorative nature than interaction with local partners, thereby associating the innovative output of cross-border collaborations with a higher degree of novelty than collaboration with local/national partners. Hypotheses i and iii are confirmed, whereas the results for hypothesis ii are inconclusive.