This paper provides empirical evidence on the relationship between R&D spillovers and R&D cooperation. It shows that firms that value incoming spillovers more and can better limit outgoing spillovers through effective knowledge protection are more likely to cooperate in R&D. The analysis also finds that cooperating firms have higher incoming spillovers and better protection of knowledge, suggesting that cooperation helps manage information flows. The results indicate that incoming spillovers are crucial for understanding cooperation, while protection against outgoing spillovers is important for firms to engage in stable cooperative agreements by reducing free-riding. Different types of cooperative partners show that managing outgoing spillovers is less critical in alliances with non-commercial research partners than between vertically related partners, while incoming spillovers are more critical in understanding R&D cooperation with such partners. The paper reviews theoretical models from industrial organization literature, which emphasize competitive motives for R&D cooperation and the issue of knowledge flows and appropriability. It also reviews empirical literature on the conditions facilitating R&D cooperation and the measurement of R&D spillovers. The empirical analysis uses data from the Community Innovation Survey (CIS) of Belgian manufacturing firms to explore the relationship between R&D cooperation and spillovers. The results show that spillovers are firm-specific and that firm-specific rather than industry-specific spillover variables are important in explaining R&D cooperation. The paper also finds that firms actively manage incoming and outgoing knowledge flows, investing in absorptive capacity and forming cooperative agreements to manage these flows. Firms in more competitive environments and those that cooperate in R&D invest more in strategic protection, increasing its effectiveness and limiting outgoing spillovers. The results support the theoretical models that stress information sharing and coordination related to incoming spillovers and free-riding related to outgoing spillovers as important elements for understanding R&D cooperation.This paper provides empirical evidence on the relationship between R&D spillovers and R&D cooperation. It shows that firms that value incoming spillovers more and can better limit outgoing spillovers through effective knowledge protection are more likely to cooperate in R&D. The analysis also finds that cooperating firms have higher incoming spillovers and better protection of knowledge, suggesting that cooperation helps manage information flows. The results indicate that incoming spillovers are crucial for understanding cooperation, while protection against outgoing spillovers is important for firms to engage in stable cooperative agreements by reducing free-riding. Different types of cooperative partners show that managing outgoing spillovers is less critical in alliances with non-commercial research partners than between vertically related partners, while incoming spillovers are more critical in understanding R&D cooperation with such partners. The paper reviews theoretical models from industrial organization literature, which emphasize competitive motives for R&D cooperation and the issue of knowledge flows and appropriability. It also reviews empirical literature on the conditions facilitating R&D cooperation and the measurement of R&D spillovers. The empirical analysis uses data from the Community Innovation Survey (CIS) of Belgian manufacturing firms to explore the relationship between R&D cooperation and spillovers. The results show that spillovers are firm-specific and that firm-specific rather than industry-specific spillover variables are important in explaining R&D cooperation. The paper also finds that firms actively manage incoming and outgoing knowledge flows, investing in absorptive capacity and forming cooperative agreements to manage these flows. Firms in more competitive environments and those that cooperate in R&D invest more in strategic protection, increasing its effectiveness and limiting outgoing spillovers. The results support the theoretical models that stress information sharing and coordination related to incoming spillovers and free-riding related to outgoing spillovers as important elements for understanding R&D cooperation.