Does absorptive capacity determine collaboration returns to innovation? A geographical dimension

Abstract

This paper aims to estimate the impact of collaboration in innovation activities with partners in different geographical areas on innovative performance. By using the Spanish Technological Innovation Panel, this study provides evidence that the benefits of collaboration differ across different dimensions of the geography. We find that the impact of extra-European cooperation on innovation performance is larger than that of national and European cooperation, indicating that firms tend to benefit more from interaction with international collaborators as a way to access new technologies or specialized and novel knowledge that they are unable to find locally. We also find evidence of the positive role played by absorptive capacity, concluding that it implies a higher premium on the innovation returns to cooperation in the international case and mainly in the European one.