Firm performance and R&D cooperation: what matters?

In this paper we analyze whether R&D cooperation improves firms' performance, and which variables would boost R&D cooperation the most. We contribute to the literature linking two different branches: using a sample of Italians firms, we analyze which are the main determinants of R&D cooperation and whether R&D cooperation improves firms' performance. Thus, we conduct a two-step analysis: in the first step we investigate the significant determinants of cooperation, and in the second we employ these determinants to test the effect of R&D cooperation on firm performance, measured by ROA, Ebitda, and value added per capita. The analysis focuses on four relevant disaggregations: (i) small, medium, and large firms; (ii) Pavitt (1984. "Sectoral Patterns of Technical Change: Towards a Taxonomy and a Theory." Research Policy 13 (6): 343-373) sectors; (iii) location (North, and Center-South); and (iv) public and private partners. Although the determinants of cooperation can vary depending on the type of disaggregation, we find that R&D cooperation always boosts firm performance, that is, on average, profitability and productivity are higher among cooperating firms compared to those that do not cooperate. Identifying the determinants of cooperation allows management and policymakers to understand which strategies should be implemented to stimulate cooperation and, consequently, to improve firms' performance.