The regional dimension of university-industry interaction

Policymakers and university managers tend to express their willingness to maximise universityindustry interaction inside the region. Implicitly they assume that the incentives and possibilities of all firms and faculty to interact inside the region are homogenous. However, there is no a priori reason to justify that interaction will not take place outside the region. The objective of this research is to analyse what type of firm managers and faculty members interact more often inside and outside the region. We use a sample of 700 firm managers and 380 faculty members from the Valencian Community, a Spanish region, coming from two surveys. Our dependent variables are proxies for the propensity to interact and the frequency of interaction inside and outside the region. Because of their qualitative nature, we run discrete choice econometric models to find their determinants. We include institutional and input variables and personal characteristics as regressors. Firm managers need a high academic degree to engage into R&D cooperation with universities, but then the frequency of cooperation with universities inside the region depends on their firm’s revenue. On the other hand, the frequency of R&D cooperation with universities outside the region depends on being part of a group. Faculty members who usually participate in contracts (male, senior, managerial faculty) do not do it more frequently with firms inside the region. In contrast, some faculty members who do no stand out for participation in contracts (those who have done research abroad for longer periods) do it so frequently with firms inside the region as with firms outside the region. We discuss first, the key role that human capital plays at firms for interaction to take place inside the region. Second, to what extent our results are idiosyncratic of a region with low absorptive capacity like the Valencian Community. We conclude that policymakers and university managers should design conscious strategies to find equilibrium between university-industry interaction inside and outside the region.