Collaboration Networks and Innovation Performance of SMEs: The Moderating Role of Intellectual Property Protection

Innovation performance of small and medium-sized enterprises (SMEs) is very important for China's economic development. However, in China, compared with large firms, SMEs' innovation capability and innovation performance are generally low. Constructing collaboration networks is an effective way for SMEs to improve their innovation performance. This study classified collaboration networks into formal collaboration networks and informal collaboration networks, and tried to examine their effects on innovation performance of SMEs. Besides, this study also investigated how these relationships can be moderated by intellectual property protection. We tested these hypotheses using hierarchical regression analysis on a sample of 174 manufacturing SMEs operating in China. The findings from the analysis showed that both formal and informal collaboration networks positively affect innovation performance of SMEs, and informal collaboration networks offer greater benefits than formal collaboration networks. Furthermore, the moderating effects of intellectual property protection on the relationships between formal and informal collaboration networks and SMEs' innovation performance are supported.

I. Introduction

In the past, China's economic development mainly relies on resource, capital and cheap labor, however, this kind of development pattern is not sustainable. The experience of developed countries shows that sustainable development of economy must rely on innovation. Therefore, Chinese government has implemented innovation driven development strategy, and taken a lot of measures to encourage firms to innovate. In China, small and medium-sized enterprises (SMEs) play an important role in implementing innovation driven development strategy, and SMEs' innovation is vital for the whole country's innovation. However, in China, compared with large firms, SMEs' innovation capability and innovation performance are generally low, and SMEs' innovation still face many obstacles such as the shortage of resources, capital, professional talents, and advanced technologies and equipment [1], [2]. Moreover, innovation become more and more complex and market competition become more and more fierce in recent years. Therefore, SMEs' innovation become more difficult under this kind of circumstance [3]. It is difficult for SMEs to innovate on their own, and they have to adopt open innovation strategy and collaborate with external organizations. Nowadays, many SMEs have started to actively construct collaboration networks with outside sources such as suppliers, customers, competitors, and universities. Through these collaboration networks, SMEs can obtain much resources and technologies which are very crucial to enhance their innovation performance [4].