Determinants of R&D cooperation: Evidence from Spanish manufacturing firms

Using firm level data, this paper explores the determinants of R&D cooperation. It focuses on the impact of information flows or spillovers on R&D cooperation, but also explores the role of the traditionally considered factors (firm size, cost and risk sharing, and complementarities). The estimation methods used allow testing the endogeneity for the explanatory variables, which in other papers are assumed to be endogenous a priori. I find that the choice of an appropriate “structure” of endogeneity has important consequences for the estimates: only in this case do cost-risk sharing and complementarities have the expected positive effect. I also find that the overall picture of the importance of the explanatory variables depends on the estimation method. In this sense, two-step procedures overestimate the importance of spillovers. With a more efficient procedure, I find that cost-risk sharing is the most important determinant of R&D cooperation in Spain. Finally, the overall results on the importance of spillovers are consistent with the existing literature, but I find that a greater level of legal protection in the industry has a negative effect on R&D cooperation.