Phone Home? Headquarters’ Involvement in Foreign University Collaboration

Abstract

Although extant research has emphasized the benefits of proximity in industry-science linkages, a substantial share of research collaborations between firms is international in scope. This paper sheds light on the question why firms opt for international research collaborations with foreign universities through R&D facilities at headquarters, instead of collaborating through their local R&D unit. We develop a set of hypotheses and argue that the decision to collaborate locally or through headquarters is governed by economic, strategic and collaboration-specific factors. We test hypotheses on a dataset of more than 10,000 geocoded collaborative scientific publications by 77 US, European and Japanese firms in the global biopharmaceutical industry, covering the period 1995-2003. We confirm that distant collaboration with headquarters is more likely if headquarter involvement is associated with scale and scope advantages, if local collaboration is associated with appropriation risks, and if collaboration focu...