Determinants of PRO(Public Research Organization)-Industry Cooperation and its impact on Firm Performance

Abstract

This paper employs the Korea Innovation Survey data which were issued in 2010 and 2011. KIS2010 is for manufacturing firms and KIS2011 is for service firms. Using these data, I analyzed determinants of industry- public research institutions cooperation and its impact on firms performance. First, in the manufacturing sector, determinants of industry-PRO cooperation are firm size and government support regardless of cooperation mode, and in service sector, only government support is a determinant to firm-government research institutions cooperation. Second, impact of industry-PRO cooperation on firms innovation is not significant in both industry sectors. Lastly, I identified the impact of industry-PRO cooperation on firm performance. I defined firm performance as three ways – the number of patents, the ratio of innovative outcomes sales to total sales and labor productivity. In the manufacturing sector, only the number of patents has a significant impact from industry-PRO cooperation, however, in the service sector, firms cooperation with universities has a significant impact only on the number of patents, and firms cooperation with GRI have significant impact on both the number of patents and sales ratio. From these results, I concluded when service firms cooperate with GRIs, there occurs knowledge industrialization, and when manufacturing firms cooperate with PRO, the accumulated patents do not link to firms sales, which means that knowledge industrialization is hard to occur in the manufacturing sector, yet. This difference between the two industries comes from each industrial characteristics, in that production and sales occur simultaneously and processes reaching to customers are relatively shorter than in the manufacturing sector. And difference resulted from cooperation partners, is because of readiness of knowledge transfer and knowledge industrialization. Technology Licensing Office plays an important role in knowledge industrialization, and TLO in the GRI has better quality than TLO in universities so that knowledge industrialization occurs when a firm cooperates with GRI. These results show that in Korea, there need more practical policies or supports to make the accumulated knowledge reach to firms sales.