Understanding the extent of explorative university involvement of Swedish SMEs

Håkan Boter
Umeå School of Business, Economics, and Statistics

Vladimir Vanyushyn
Umeå School of Business, Economics, and Statistics

Jessica Eriksson
Umeå School of Business, Economics, and Statistics

Abstract
Universities can be an important source of input into SMEs explorative activities, in particular in light of SMEs having limited resources (Olmos-Peñuela et al, 2017). Explorative efforts entail scanning for information and knowledge that can result in novel combinations relative the firm’s existing knowledge base and are typically part of a broad search strategy spanning several different sources (e.g. Eriksson, et al, 2016), and scientific knowledge can serve as a source of inspiration and provide opportunities to identify and test promising ideas. Despite this, universities are typically not featured as the most preferred source of external knowledge for SMEs (Cruz-González, López-Sáez, Navas-López & Delgado-Verde, 2014), for instance due scientific knowledge being difficult to access and understand (Tödtling & Kaufmann, 2001). Such forms of SME - university collaboration however remain largely under-researched. Hence, in this study we seek to (a) identify the antecedents of SMEs’ university involvement and (b) establish firm-specific conditions that can affect the extent of university involvement.

With a foundation in literatures on absorptive capacity, explorative search and university-industry collaboration, we formulate the main effect and two moderating hypotheses:

H1: The explorative efforts of SMEs has a positive effect on the extent of university involvement.
H2: Networking capability (NC) moderates the effect of SMEs’ explorative efforts in such a way that firms with higher levels of networking capability convert explorative efforts into higher levels of university involvement.
H3: International orientation (IO) moderates the effect of explorative efforts in such a way that SMEs with higher levels of IO convert explorative efforts into higher levels of university involvement.

Data for our study was collected through a survey in collaboration with Swedish Bureau of Statistics. 1228 firms with 250 employees or less form the final sample, corresponding to a response rate of 31%. As our interest lies in understanding the extent of firm’s involvement with a university, we specify depended variable university involvement UNIINVOLVE as a continuous summated scale of three items: extent to which university’s academic culture inspires the firm, identification of promising ideas and evaluation of ideas. We also develop a binary variable UNICOOP that indicates whether a firm cooperated with the university or not. Inclusion of this variable is necessary to account for the selectivity mechanism present in our data as only firms that actually cooperated with universities (n=350 out of 1228) provided answers to the dependent variable UNIINVOLVE. Hence, we specify and our model as a selection one, whereby firms first decide whether they to cooperate with a university and then the extent of such cooperation. Econometric specification is ML Heckman selection model (Greene, 2012).

In line with earlier studies, we find that larger firms are more likely to cooperate with universities, and that industry affiliation affects firm’s propensity to cooperate, with firms in high-technology services cooperating most. As expected, explorative effort has a positive effect on the extent of university involvement. The results show that higher levels of both international orientation and networking capability amplify the effect of exploratory efforts. Worth noting is that while low levels of international orientation does not adversely affect outcomes of firm’s explorative efforts – as the line is almost flat, yet low levels of networking capability does. We show that networking capability is an essential precursor for extended university involvement, as firms with low capability networking will be unable to increase their level of involvement regardless of the magnitude of their exploratory efforts.

Our study contributes to the field of university-industry interaction by highlighting relationships between university collaboration and the complementary factors of international orientation and networking capability. Policy makers on the national level as well as the university level can utilize the findings for directing support efforts tailored for specific needs of SMEs and their preferred collaboration types.