Profitability and the formation of SMEs’ university-industry collaboration portfolios: the moderating roles of institutional development and absorptive capacity

It has become a common phenomenon for small and medium-sized enterprises (SMEs) in China to construct university-industry collaboration (UIC) portfolios with universities and research institutes. However, little scholarly attention has been given to the relationship between profitability and UIC portfolio formation of SMEs. Using data on manufacturing firms listed on the Chinese SME board from 2011 to 2022, this study explores the impact of profitability on the formation of SMEs’ UIC portfolios. The results suggest that profitability has a positive influence on SMEs’ UIC portfolio formation. In addition, institutional development strengthens the positive effect of profitability on UIC portfolio formation, and absorptive capacity also strengthens the effect. These findings contribute to extant research on UICs, alliance portfolios and UIC portfolios and provide meaningful practical implications for SMEs.