Technological Collaboration: Bridging the Innovation Gap between Small and Large Firms

This paper analyzes how technological collaboration acts as an input to the innovation process and allows small and medium-sized enterprises to bridge the innovation gap with their bigger counterparts. Based on a large longitudinal sample of Spanish manufacturing firms, the results show that though technological collaboration is a useful mechanism for firms of all sizes to improve innovativeness, it is a critical factor for the smallest firms. The impact of this collaboration varies depending on innovation output and type of partner. Specifically, the impact of collaboration in small and medium-sized firms is more significant for product than process innovations. Regarding type of partner, vertical collaboration-with suppliers and clients-has the greatest impact on firm innovativeness, though this effect is clearer for medium-sized enterprises than for the smallest firms.