Drivers of Knowledge Exchange from Indian Universities: The Role of Signaling under Asymmetric Information

37 Pages Posted: 26 Oct 2018 Last revised: 25 Sep 2020

See all articles by Amit S Ray

Amit S Ray

Jawaharlal Nehru University - Centre for International Trade and Development

Abhijit Sengupta

Surrey Business School, University of Surrey

Date Written: September 28, 2018

Abstract

This paper explores the key drivers of knowledge exchange from Indian universities which are associated with high degrees of information asymmetry between them and potential users of their research. Such asymmetries result in typical adverse selection and moral hazard problems afflicting knowledge markets in emerging nations. This motivated us to identify specific organizational characteristics, which may ameliorate this situation by acting as “signals” of quality and intention, in the absence of more direct mechanisms common in developed contexts. This paper addresses a gap in the literature on the nature of the relationship between university research and knowledge exchange in emerging nations and examines the direct and indirect role of university specific signals on this relationship. We find that basic research output and the strength of signaling from a university are positively associated with its knowledge exchange performance, but the marginal impact of signaling is far higher than research output itself. Also, each signal directly impacts a single channel of knowledge exchange only, and this depends on the specific signal being considered. Signal strength negatively moderates the research-knowledge exchange link, implying that universities for which signals are strong, knowledge exchange activities develop a degree of self-sufficiency, and for the rest, creating an appropriate research base is important to begin with.

Keywords: knowledge exchange, adverse selection, moral hazard, emerging markets, university industry link

JEL Classification: O32, O33, O34, O35

Suggested Citation

Ray, Amit S and Sengupta, Abhijit, Drivers of Knowledge Exchange from Indian Universities: The Role of Signaling under Asymmetric Information (September 28, 2018). Available at SSRN: https://ssrn.com/abstract=3256721 or http://dx.doi.org/10.2139/ssrn.3256721

Amit S Ray

Jawaharlal Nehru University - Centre for International Trade and Development ( email )

School of International Studies
New Delhi, Delhi 110067
India

Abhijit Sengupta (Contact Author)

Surrey Business School, University of Surrey ( email )

Guildford, Surrey GU2 7XH
United Kingdom

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