Firm Collaboration and its Impact on Product and Process Innovations

Abstract: This paper examines the influence of different external knowledge sources used by firms in Jönköping County, Sweden, on the probability that a firm develops product innovations, process innovations, both types of innovations, or no innovation. The analysis is done by building a logit model for each of the four innovation outcomes. The external sources considered are STI (Science, Technology and Innovation) collaboration partners, and DUI (Doing, Using and Interacting) collaboration partners. An STI collaboration comprises knowledge linkages to universities and colleges, public R&D institutes, private R&D institutes, and consultancies. DUI collaborations are interactions with firms within the same corporate group, within the same industry, within the supply chain (supplier, client), and outside the supply chain (competitor). The results indicate a generally higher importance of DUI collaboration partners than of STI collaboration partners for the development of innovations. Firms that develop product innovations use a more diversified set of external sources of both DUI and STI type, with a focus on partners from the same concern and private R&D institutes. On the contrary, firms developing process innovations use a less diversified set of external sources and focus on partnerships both within the same concern and the same industry, as well as with suppliers. Regarding the spatial dimension of collaboration, intra-, extra-regional and international knowledge linkages generally matter for being innovative, where the focus lies on cooperation within the country. Overall, the regression results for the different innovation types show similarities, which imply that there is an interconnection of the development of product and process innovations.