Collaboration between firms and universities in Italy: the role of a firm�s proximity to top-rated departments

In the last decade R&D expenditure in Italy has been lagging at a bare 1.2-1.3 per cent of GDP. Its private share is low by international standards and Italian firms take out only a small number of patents. External sources of innovation, however, are available to firms. This work aims at examining the determinants of research collaboration between firms and universities using the results of the 15th Bank of Italy Business Outlook Survey on Firms, together with data on the quality and importance of university research. Controlling for endogeneity problems, we show that the distance from top research centres is the most important factor in determining the probability of collaboration. Other results indicate that the presence of different innovation sources increases the probability of collaboration; and that proximity is more important for small- and medium-sized firms, while larger ones collaborate with universities that are better able to sell the results of their research, regardless of their location. Sector effects also emerge from the analysis.