Research Policy 37 (2008) 240–257 Available online at www.sciencedirect.com The impact of firm participation in R&D programmes on R&D partnerships Isabel Busom a,∗ , Andrea Fern´ andez-Ribas b,1 a Departament d’ Economia Aplicada, Universitat Aut` onoma de Barcelona, 08193 Bellaterra, Spain b School of Public Policy, Georgia Institute of Technology, Atlanta, GA 30332-0345, USA Received 27 July 2005; received in revised form 1 December 2006; accepted 13 November 2007 Available online 3 January 2008 Abstract R&D subsidies designed to encourage innovation efforts by firms may have intended and unintended effects on the way they organize their innovation process. We present empirical evidence on how R&D subsidies affect firms’ R&D cooperation strategies. In particular, we investigate whether receiving public R&D subsidies affect the probability that a firm will set up an R&D partnership with a public research organization (PRO), or with other firms. Our main findings are: (i) public support significantly increases the chances that a firm will cooperate with a PRO, and (ii) public support also increases the likelihood that a firm will establish private partnerships, but to a smaller extent and only when firms have intangible knowledge assets. These results suggest that public R&D programmes trigger a behavioural change in firms’ R&D partnerships, alleviating barriers to cooperation. © 2007 Elsevier B.V. All rights reserved. JEL classification: O31; O38; H32; C25; C35 Keywords: R&D; Vertical cooperation; Public–private partnerships; Innovation policy 1. Introduction New trends in the way R&D is conducted and orga- nized have emerged over the last 20 years, along with a steady increase in R&D and innovation effort and out- put. The development of networks or alliances among firms, or between firms and public R&D laboratories or universities, is one of them. Several indicators support this claim. The share of patent co-applications in triad patent families has almost doubled since 1980, and the ∗ Corresponding author. Tel.: +34 93 581 16 80; fax: +34 93 581 22 92. E-mail addresses: Isabel.Busom@uab.es (I. Busom), afribas@gatech.edu (A. Fern´ andez-Ribas). 1 Tel.: +1 404 894 0730; fax: +1 404 385 0504. number of strategic technology alliances has, on aver- age, almost tripled. Over the period 1999–2001, about 7% of patents filed at the European Patent Office were the result of international collaboration (Hagedoorn, 2002; OECD, 2002, 2005). The Community Innovation Survey (CIS), a firm-level survey conducted in European Union (EU) member countries, provides further information on the extent and type of R&D partnerships. 2 On average, 2 The Community Innovation Survey is a European-wide firm-level survey focusing on innovation and R&D. It has been conducted four times (in 1992, 1996, 2001 and 2004) in all European Union member countries. The questionnaire has a set of common core questions for all countries. Definitions and survey methodology are based on the OECD’s Oslo Manual. For more information about the CIS project see the European Union web page http://cordis.europa.eu/innovation- smes/src/cis.htm. 0048-7333/$ – see front matter © 2007 Elsevier B.V. All rights reserved. doi:10.1016/j.respol.2007.11.002