The determinants of firms' PhD recruitment to undertake R&D activities

• We have analysed the factors which determine the employment of PhDs by firms.
• Upstream and downstream contingencies of the innovation process increase the employment of PhDs.
• PhDs holders are essential in firms involved in R&D cooperation.
• Public funding and firm location are determinants to increase the number of PhD holders in firms.

We have analysed the determinant factors which condition firms' employment of PhDs to undertake R&D activities. It has been traditionally thought that doctorate holders are employed only to generate and absorb scientific knowledge; nonetheless, our study has also revealed that there are additional reasons to employ PhD graduates. We have used an upstream–downstream approach of the innovation process, to establish which contingencies of this process increase the number of PhD holders in firms. We have focused on four contingencies: R&D cooperation, types of R&D activities, failures in the innovation process and key information sources to put into motion the innovation process. Results of this study have confirmed that PhD holders not only play upstream roles in the innovation process but in addition also downstream tasks undertaking knowledge exploitation activities.