Searching Near and Far: Determinants of Innovative Firms' Propensity to Collaborate Across Geographical Distance

Abstract

The paper explores the relation between absorptive capacity and the propensity to collaborate across geographical distance. The analysis is based on quantitative data from two neighbouring Danish regions on the location of the main partner in product‐innovation activities. The findings indicate that the importance of absorptive capacity in relation to collaboration across geographical distance depends on the location of the innovative firm. Firms located in the relatively sparsely populated region are more likely to collaborate with firms located outside the region; and for these firms, the level of absorptive capacity matters for the distance to the collaboration partners—firms with a low level of absorptive capacity tend to collaborate with domestic partners, while those with a high level of absorptive capacity are much more likely to find their main product‐innovation partner abroad.