Formal and Informal Knowledge and Technology Transfer from Academia to Industry: Complementarity Effects and Innovation Performance

Abstract

Literature has identified formal and informal channels in university knowledge and technology transfer (KTT). While formal KTT typically involves a legal contract on a patent or on collaborative research activities, informal transfer channels refer to personal contacts and hence to the tacit dimension of knowledge transfer. Research is, however, scarce regarding the interaction of formal and informal transfer mechanisms. In this paper, we analyze whether these activities are mutually reinforcing, i.e., complementary. Our analysis is based on a comprehensive data-set of more than 2,000 German manufacturing firms and confirms a complementary relationship between formal and informal KTT modes: using both transfer channels contributes to higher innovation performance. The management of the firm should therefore strive to maintain close informal relationships with universities to realize the full potential of formal KTT.

Keywords::

• University knowledge and technology transfer
• complementarity
• innovation performance

Keywords::

• L24
• O31

Notes

¹ In the following, we will use the term “university scientist” as shorthand for scientists employed at universities or other public research institutes.

² The definition of the industry classification can be found in Appendix Table A1.

³ Note that the percentage of innovation sales is derived from the last three years.

⁴ We checked if the negative effect of firm age is driven by our specification by including a squared term of the age variable. Both the linear and the squared term were significant, the linear with a negative and the squared term with a positive sign. This would suggest a U-shaped relationship. However, the turning point lies to the right of the data cloud so that this finding actually supports a negative relationship between the use of formal technology transfer channels and firm age. It has to be noted that the effect of firm age is distinct from the effect of firm size since the two variables measure two different dimensions, with mature firms not necessarily being large and vice versa. The low correlation of 0.19 between the variables supports this perspective.

⁵ Note that the low levels of significance for the coefficients for informal and formal KTT are caused by their high correlation indicated by a correlation coefficient of 0.74. This suggests that with different, less correlated measures for the individual KTT links the coefficients might become significant so that their nonsignificance should not be overinterpreted.