Knowledge is increasingly perceived as a fulcral factor to company competitiveness. As the transfer of knowledge is one of the key functions of knowledge intensive business services (KIBS), this research seeks to analyse how the transfer of knowledge takes place between the higher education sector and KIBS type firms. The empirical results show that cooperation between KIBS and universities occurs irrespective of the typology (whether professional or technological in focus). We also empirically establish how geographic proximity is the factor bearing greatest influence over cooperation while such cooperation proves to have a positive impact on the company capacity to innovate. We furthermore find that this innovation capacity also drives a positive company financial performance.