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The impact of financial slack on explorative and exploitative knowledge sourcing from universities: evidence from the UK

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  • Johan Bruneel
  • Pablo D’Este
  • Ammon Salter

Abstract

Some organizations use universities to explore new areas, whereas others turn to universities to exploit knowledge for immediate and practical gain. Drawing on the behavioral theory of the firm and the literature on university–industry collaboration, we examine how the level of financial slack available to a firm influences their level of explorative and exploitative knowledge sourcing from universities. We suggest that two types of proximity moderate this relationship: organizational and geographical. Using on a rich sample of university collaborators, we find—consistent with our expectations—that high levels of financial slack are associated with explorative knowledge sourcing, whereas low levels of slack are associated with exploitative knowledge sourcing. Our results also point out that organizational proximity can complement for the lack of financial slack in shaping explorative knowledge sourcing, while it can heightens the effects of low levels of financial slack on exploitative knowledge sourcing. In contrast, we find that geographical proximity plays a weaker moderating role compared to organizational proximity. We explore the implications of these findings for our understanding of university–industry collaboration.

Suggested Citation

  • Johan Bruneel & Pablo D’Este & Ammon Salter, 2016. "The impact of financial slack on explorative and exploitative knowledge sourcing from universities: evidence from the UK," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 25(4), pages 689-706.
    • Handle: RePEc:oup:indcch:v:25:y:2016:i:4:p:689-706.
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    File URL: http://hdl.handle.net/10.1093/icc/dtv045
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    Cited by:

    1. Ashish Arora & Sharon Belenzon & Lia Sheer, 2017. "Back to Basics: Why do Firms Invest in Research?," NBER Working Papers 23187, National Bureau of Economic Research, Inc.
    2. Nasirov, Shukhrat & Joshi, Amol M., 2023. "Minding the communications gap: How can universities signal the availability and value of their scientific knowledge to commercial organizations?," Research Policy, Elsevier, vol. 52(9).
    3. Arman Yalvac Aksoy & Catherine Beaudry, 2021. "How are companies paying for university research licenses? Empirical evidence from university-firm technology transfer," The Journal of Technology Transfer, Springer, vol. 46(6), pages 2051-2121, December.
    4. Yongli Tang & Kazuyuki Motohashi & Xinyue Hu & Angeles Montoro-Sanchez, 2020. "University-industry interaction and product innovation performance of Guangdong manufacturing firms: the roles of regional proximity and research quality of universities," The Journal of Technology Transfer, Springer, vol. 45(2), pages 578-618, April.
    5. Slavova, Kremena & Jong, Simcha, 2021. "University alliances and firm exploratory innovation: Evidence from therapeutic product development," Technovation, Elsevier, vol. 107(C).
    6. Wu, Lichao & Wei, Yingqi & Wang, Chengang & McDonald, Frank & Han, Xia, 2022. "The importance of institutional and financial resources for export performance associated with technological innovation," Technological Forecasting and Social Change, Elsevier, vol. 185(C).
    7. Xiao, Fenglong, 2022. "Non-competes and innovation: Evidence from medical devices," Research Policy, Elsevier, vol. 51(6).

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