Abstract

In addition to its advantages, collaboration for innovation might increase the cost of innovation because of leakages of strategic information, appropriability problems and coordination difficulties. When collaborating with public research institutions (pris) the latter problem is expected to be more severe, thus raising the probability of project failure. The aim of this paper is to investigate whether and to what extent collaboration for innovation raises the probability of failure, i.e. delay or abandonment of innovative projects. It also aims to verify whether and to what extent collaboration with PRIs increases the likelihood of failure. We use data from the fourth Italian Community Innovation Survey (CIS 4), which collected data for the three-year period 2002-2004. The empirical results support the hypothesis that collaboration significantly affects the probability of delay or abandonment of innovative projects. However, collaboration with PRIs does not increase the likelihood of failure compared to collaboration with other partners. Moreover, we find that delays are influenced by cost factors (such as lack of financial resources) or knowledge factors (such as lack of qualified personnel) while abandonment is significantly associated with market factors (such as uncertain demand).