University R&D activities and firm innovations

This paper combines firm R&D activities with local university R&D activities to investigate the spillover effect of universities on firm innovations. First, we find a positive relationship between universities' total funding and firm innovations in the same city, which is evidence of positive spillovers from university R&D activities. Funding from the government has larger spillovers than funding from other channels. Second, firms' internal R&D expenditure does not affect the extent to which they obtain spillovers from local university R&D activities. High-tech firms and firms from the main board generally gain larger spillovers from university R&D activities.