University R&D and firm productivity: Evidence from Italy

Ed Mansfield wrote several papers on the private returns to basic research (e.g. Mansfield, 1980) and the influence of academic research on industrial innovation (e.g. Mansfield, 1991). We extend this line of research by assessing the impact of university research on total factor productivity growth of Italian manufacturing firms. The econometric analysis is based on reduced-form estimation of the R&D capital stock model, including controls for two potential sources of sample selection bias, as proposed by Crepon et al (1998) and Piga and Vivarelli (2004). Our results suggest that while there are positive returns to collaborative research with other firms, collaborative research with universities does not appear to directly stimulate productivity. We interpret this result as consistent with recent evidence (e.g. Hall et al 2001, 2003) suggesting that firms engage in collaborative research with universities when appropriability conditions are weak.