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Innovation Networks of High Tech SMES: Creation of Knowledge but no Creation of Value

Author

Listed:
  • Rob Winters

    (Netherlands Ministry of the Interior and Kingdom Relations)

  • Erik Stam

    () (University of Cambridge, Utrecht University; Max Planck Institute of Economics)

Abstract

This paper analyses the effects of innovation networks on product and process innovation and sales growth of high technology SMEs. Innovation net- works are positively related to both product and process innovation, i.e. knowledge creation. One exception is the negative effect of innovation networks with suppliers on product innovation. Older SMEs are more product innovative than young SMEs. The positive relation between firm size and (process) innovation, disappears when networks are introduced into the analyses. The general conclusion is that vertical innovation networks remove the effect of firm size on process innovation. In other words, high-tech SMEs can ‘borrow’ size if they co-operate with customers, but especially with suppliers for process innovation. So smallness is not necessarily a disadvantage for innovation, as long as firms cooperate with other organisations. Innovation and networks do not seem to effect value creation, measured as sales growth.

Suggested Citation

  • Rob Winters & Erik Stam, 2007. "Innovation Networks of High Tech SMES: Creation of Knowledge but no Creation of Value," Jena Economic Research Papers 2007-042, Friedrich-Schiller-University Jena.
  • Handle: RePEc:jrp:jrpwrp:2007-042
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    References listed on IDEAS

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    More about this item

    Keywords

    innovation; innovation networks; high tech SMEs; firm growth;

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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