The effects of universities' proximity to industrial districts on university-industry collaboration

There is increasing awareness that university-industry collaboration provides an important knowledge transfer channel and, thus, is a powerful driver of innovation. Universities are increasingly being asked to play incisive roles in the process of regional economic development. This paper assesses the extent to which university-industry collaboration, expressed in terms of private funding for university consulting research activities, is affected by the geographic proximity of an academic institution to an Industrial District (ID). Although the economic literature insists on the positive effects of proximity for these collaborations, empirical work on Italian ID so far shows no particular effects. This paper provides new insights into the effects of academic proximity to ID on university-industry collaboration, by presenting robust evidence that proximity to districts promotes the establishment of collaboration agreements. This sheds new light on the need for targeted policies to support local productive systems. The empirical evidence is based on an analysis of qualitative information and an econometric analysis of financial data for the whole population of Italian university departments engaged in research in the Engineering and Physical Sciences.

► The paper investigates the effects of university proximity to industrial districts on university-industry collaboration. ► The empirical evidence is based on financial data of Italian university departments. ► The aggregate level of industry funding for research is much higher in departments located near a district than in other departments. ► University proximity to a district positively affects the probability of and the amount of business funding. ► There is also evidence of complementarity between public and private funding to university research.