The impact of higher education institution-firm knowledge links on establishment-level productivity in British regions

In this paper we estimate whether sourcing knowledge from and/or cooperating on innovation with higher education institutions impacts on establishment-level total factor productivity and whether this impact differs across domestically owned and foreign-owned establishments and across the regions of Great Britain. Using propensity score matching, the results show overall a positive and statistically significant impact although there are differences in the strength of this impact across production and non-production industries, across domestically owned and foreign-owned firms, and across regions. These results highlight the importance of absorptive capacity in determining the extent to which establishments can benefit from linkages with higher education institutions.