Foreign and domestic university collaboration for outbound open innovation

Abstract

Outbound open innovation, the external commercialization of the firm's knowledge, is important for creating and sustaining its competitive advantage. Surprisingly, limited studies have explained how and why a firm can enhance its likelihood of engagement in outbound open innovation activities by collaborating with universities, especially foreign ones. Building on the knowledge-based view (KBV), first, we differentiate the effects of collaborating with foreign versus domestic universities, since these create scientific knowledge that varies in novelty and ease of transfer. Second, based on these two knowledge dimensions, we argue that foreign university collaboration is more likely to have a higher positive association with outbound open innovation than domestic university collaboration, because the former has higher knowledge novelty than the latter. Third, however, when firms also collaborate with domestic value chain partners, collaborating with domestic universities is likely to have a higher positive association. We tested these arguments on 541 firms in New Zealand and found that collaborating with foreign universities has a positive association, especially when the universities are located in developed economies. Collaborating with domestic universities has a positive association when firms also collaborate with their domestic value chain partners.