This paper investigates co-operative research activity by firms using data from
the 3rd Community Innovation Survey for four countries, France, Germany, Spain and the
UK. We build on the Cassiman and Veugelers (CV) (2002) study of Belgian manufacturing
firms, by incorporating information on the service sector, and considering the role of public
support in affecting firms’ decisions to co-operate. Our results support those in CV, in that
we find a positive relationship between the likelihood of undertaking co-operative R&D
and both incoming knowledge spillovers and the extent to which firms find strategic
methods important in appropriating the returns to innovative activity. We find that public
support is positively related to the probability of undertaking co-operative agreements
particularly with regard to the likelihood of co-operation with the research base. We find
some evidence, in particular for Spain, that firms carry out co-operative R&D to overcome
excessive perceived risks and financial constraints
