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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.