Geographical Proximity and Manufacturing Innovation through Industry–Academia Collaboration
Zeyang Li, Feifei Fang, Lixuan Zhang
Keywords:
Geographical Proximity, Manufacturing Firm Innovation, Industry–Academia Collaboration, Patent Application
Abstract:
Formal R&D collaborations enable firms to leverage knowledge as a strategic resource for enhancing their competitive position in the market. However, the relationship between such collaboration and geographical proximity remains complex. To help explain mixed findings in existing research, we combine ideas from absorptive capacity and knowledge diversity preference. Our findings reveal an inverted U-shaped pattern between geographical proximity and industry–academia collaborative innovation. Weaker decay rate of absorption capacity intensifies this effect, whereas the pursuit of knowledge diversity mitigates it. Additionally, we identify that pro-innovation policies matter, and geographical features and industry competition degree serve as sources of heterogeneity. Furthermore, rather than expanding partnerships to other organizations, firms are more likely to retain benefits from existing collaborations to reduce competition within industry and strengthen their own market power. Collaboration with universities exhibits a stronger positive effect on firm survival, while working with top-tier universities tends to limit a firm’s capacity for further innovation. This study offers a novel perspective for understanding the dynamics between geographical proximity and knowledge externalities, and provides practical insights for firms seeking to enhance competitiveness through industry–academia collaboration.
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 Geographical Proximity and Manufacturing Innovation through Industry–Academia Collaboration [PDF file] [Filesize: 936.79 KB]
 10.7441/joc.2026.02.07
Li, Z., Fang, F., & Zhang, L. (2026). Geographical Proximity and Manufacturing Innovation through Industry–Academia Collaboration. Journal of Competitiveness 18(2), 181–206. https://doi.org/10.7441/joc.2026.02.07
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