This paper questions how a firm's R&D (Research and Development) interaction with universities affects its innovation performance. A large body of empirical studies confirms that the use of academic knowledge is beneficial to technological change, innovation and growth in the private sector, through new theoretical insights, techniques, and skills of a kind that industrial firms find difficult to provide themselves with (see Griliches, 1979 and 1986; Nelson, 1986; Jaffe, 1989; Mansfield, 1997 and 1998; Henderson et al., 1998; Zucker et al., 1998; Adams, 2002; and Zucker and Darby, 2005). However, as Griliches (1994) notices, investigating the importance of academic knowledge on business activities is not a simple exercise. In part, the problem is due to difficulties in constructing the experiments that would isolate the connection between science and innovation.

A number of quantitative studies confirm a positive association between the university-industry link and innovation at the firm level (Mansfield, 1998; and Cassiman and Veugelers, 2006). In particular, firms who collaborate with universities are generally those who introduce the most original innovations, whereas, no general association between collaboration and a firm's ability to introduce incremental types of innovation, can be found (Monjon and Waelbroeck, 2003; and Hanel and St. Pierre, 2006).

It should be noted that since the university collaborators are a selective group of firms, the results reported above can be interpreted as mere correlations. However, studies using counterfactual estimation techniques to address causality issues with control groups, seem to support the positive impact of R&D collaboration on firms—at least for certain types of firms. Lööf and Broström (2008) report evidence from Swedish CIS (Community Innovation Survey) data that university collaboration positively influences innovation sales, as well as the propensity to apply for patents, for manufacturing firms with more than 100 employees. In contrast, whatever specification of the empirical model, the data shows no significant association between university collaboration and the average service firm's innovation sales, or the propensity to apply for patents. Arvanitis et al. (2008), who performed a similar analysis on Swiss data, do not distinguish between firm types, but between different types of interaction with universities—research-oriented and education-oriented, respectively. The authors find that both types of interaction improve the innovation performance of the firms in terms of sales of considerably modified products, research activities, and also in terms of sales of new products.

R&D Management, Swedish Setting, Research and Development, Community Innovation Survey, CIS, Innovation Processes, Management Scholars, Anthropologists, European Framework Programs, EFPs, Advanced Technology Program, ATP, Management Science, Industrial Organization.