University-industry collaboration, innovation and firms’ performance: the context of China.

Abstract

The objective of this thesis is to investigate how different patterns of University-Industry Collaboration (UIC) affect firms’ innovation outputs and economic performance. Chinese policy-makers have identified innovation as the key to overcoming the middle-income trap and achieving sustainable economic growth. As such, the importance of universities as innovation partners for industrial firms has increasingly been recognised. However, the understanding of how UIC contributes to innovation and firms’ performance remains limited, particularly in terms of the informal UIC and the management innovation of firms. Drawing on prior literature, this thesis conceptualises two UIC patterns as the ‘Contractual Collaboration’ and the ‘Relational Collaboration’ and explores how these two UIC patterns affect firms’ innovation outputs and economic performance. Empirical data employed in this research was gathered from Chinese manufacturing firms. The results reveal that contractual UICs go beyond making the expected impact on firms’ technological innovations, as it also promotes firms’ organisational changes and new business practices, the latter being mainly achieved through the mediating effects of technological innovation. Neither proximity nor the research quality of universities significantly affect firms’ innovation outputs in contractual UICs. The relational UIC, which refers to a variety of informal collaboration methods, positively affects firms’ technological and management innovations, with the link being strongest between relational UICs and management innovations. Also, these innovations positively contribute to the economic performance of firms. When engaged in the relational UICs, small and medium sized enterprises (SMEs) and high-tech firms perform better in management innovations. Findings from this thesis suggest that firms, wherever necessary, should establish formal collaboration networks with universities for better innovation performance. For SMEs who either cannot defray the costs/risks of entering into a formal collaboration or are not capable of absorbing cutting-edge codified knowledge, collaboration with universities via relational channels is an important pathway to better innovation and economic performance. Policy-makers, especially in countries where formal links between science and industries have yet to be fully established, should recognise the importance of the informal innovation network between universities and firms. Also, policy tools should focus on encouraging the lower-ranked regional universities into their local innovation systems rather than solely concentrating on innovation collaborations between elite universities and large firms.