University-industry collaboration in R&D to reduce the informal economy and strengthen sustainable development

Abstract

University-industry collaboration in R&D has great potential as a partnership that promotes sustainable development. This article aims to confirm that university-industry collaboration in R&D contributes to reducing the size of informal economy and strengthening sustainable development. Correlation and causal analysis are applied to achieve this goal: Shapiro-Wilk test, Pearson’s and Spearman correlation methods, vector autoregression and Granger causality test are used on the basis of STATA software for a cross-country sample of 10 countries with the highest Sustainable Development Index over 2011-2018. Research results show that stronger university-industry R&D collaboration contributes to more robust sustainable development in 6 out of 10 sample countries and shrinking informal economy in 4 out of 10 countries. In turn, growth of the informal economy leads to a decrease in university-industry R&D collaboration in 5 out of 10 countries and inhibits sustainable development in 7 out of 10 countries. In conclusion, policymakers should transform the national policy and strategy to emphasize and strengthen R&D cooperation between the universities and the industry.