University-Industry R&D Collaboration as an Engine of Firm Growth? An empirical evaluation of knowledge cluster policies in Japan

Author Name OKAMURO Hiroyuki (Hitotsubashi University) / IKEUCHI Kenta (Fellow, RIETI)
Creation Date/NO. May 2017 17-J-037
Research Project Microeconometric Analysis of Firm Growth
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University-industry research and development (R&D) collaboration has been attracting much attention as an effective means to promote innovation. Also in Japan, public support has been provided to such local R&D collaboration through cluster policies. However, no empirical evaluation has been made using micro data regarding the Ministry of Education, Culture, Sports, Science and Technology (MEXT)'s knowledge cluster policies, which are comparable to those in Europe. Thus, using micro data from public statistics and fixed effect panel estimation, this paper empirically examines the direct effects of these cluster policies on R&D expenditures of cluster universities and firms, on the business performance (including sales growth and productivity) of participating firms, as well as their spillover effects on all manufacturing plants in cluster regions. Estimation results show that after cluster participation, 1) universities and research institutes significantly increased internal and external research expenditures and research funding from private firms, 2) participating firms' business performance did not significantly improve, and 3) manufacturing plants in cluster areas instead significantly decreased labor productivity compared to their counterparts that were not located in cluster areas. These results suggest that MEXT's cluster policies promoted university-industry R&D collaboration, which, however, did not induce overall growth of participating firms’and local manufacturers’productivity.