Knowledge that Transforms

Research and innovation partnerships involving firms or firms and public research organizations (PROs) have been increasing over the last twenty years in OECD countries. In this paper we present empirical evidence about the impact of government sponsored R&D programs on firms’ partnership strategies related to R&D. Using a sample of Spanish manufacturing firms we estimate the effects of receiving public support on the probability that firms set up an R&D partnership with a PRO or a partnerhsip with other firms that are suppliers or customers. Controling for the endogeneity of participation in R&D support programs, we find that (i) the choice of private-private and of public-private partnerships is associated with different firm characteristics, and (ii) public support encourages directly or indirectly both types of cooperation, but the impact on public-private partnerships is larger. Results suggest that R&D cooperation is affected by market failures, and that public programs subsidizing industryscience links trigger a behavioral change in firms’ R&D strategic partnerships. JEL CODES: O31, O38, H32, C25, C35.