Does cooperative research affect firms' technology spillovers? Evidence from China

This study builds a multi-product firm model with endogenous diversified innovation behaviors to highlight a micro-mechanism through which cooperative research affects firm-level technology spillovers. The model indicates that cooperative research promotes firm-level technology spillovers through knowledge-complementing and cost-sharing effects. Our theoretical conclusions are further supported by empirical analysis using matched data from the China Patent Database and the Industrial Enterprise Innovation Survey. The finding remains robust after addressing endogeneity concerns and conducting robustness tests. Heterogeneity analysis is carried out based on firm attributes, firms' locations, and the level of technology spillovers. Our study further contributes to the literature by revealing that firms' innovation cooperation with domestic research institutes and universities is significantly conducive to firm-level technology spillovers, while innovation cooperation with domestic firms and foreign institutes is not. Overall, our study provides some references for the decision-making of Chinese firms seeking to improve their R&D capabilities through cooperative innovation.