Direct and Indirect Ties to Universities: Firm Heterogeneity, R&D Collaboration and Innovative Performance in the Biopharmaceutical Industry

In knowledge intensive industries, firms often conduct collaborative research both with universities and with other firms, but the implications of such simultaneous engagement in R&D collaboration with different types of partners has not received due attention. We examine whether there are potential complementarities or incongruities related to simultaneous engagement in multiple types of research collaborations, and potential heterogeneity among firms in the benefits of collaboration. Drawing on panel data for 40 major pharmaceutical firms, we find that positive effects of direct university collaboration are restricted to firms with sufficient absorptive capacity to assimilate scientific knowledge. Firms lacking such capacity instead benefit from 'indirect' ties with universities (collaboration with university-centred dedicated biotech firms) while direct university collaboration only undermines the benefits of their inter-firm research alliances.