University knowledge spillovers and innovation of hidden champions: evidence from Italy

Hidden champions (HCs) are niche market leaders and innovation is key for them to stay competitive and retain market and technology leadership. While prior research has stressed the importance of customers and internal R&D as sources of innovation for HC, we know little about the role of universities in this regard. Using a knowledge spillover lens, we investigate how the regional proximity of HCs to universities influences their innovation output. Drawing on a sample of 124 Italian HCs, we show that HCs located in proximity to universities have higher innovation output as compared to other HCs. The size of the spillover effect depends on university characteristics and thus both on the size and type of the knowledge base. Our study contributes to a better understanding of the innovation process of HCs and how they interact with universities in a regional innovation ecosystem.