Moderation in all things: Industry-university-research alliance portfolio configuration and SMEs’ innovation performance in China

Abstract

ABSTRACT Industry-university-research (IUR) alliance portfolio configurations are vital for small- and medium-sized enterprises (SMEs). Our study extends the knowledge-based view and transaction cost theory on SMEs’ IUR alliance portfolio configurations and their deployment in different institutional conditions. We analyze these IUR alliance portfolio configurations in a panel data of listed SMEs in China’s manufacturing industry. Our findings indicate that both breadth and depth dimensions of these IUR alliance portfolio configurations have an inverted U-shaped association with SMEs’ innovation performance. Moreover, developed institutional conditions, characterized by high degrees of regional marketization, strengthen the positive effect of both breadth and depth, thereby, intensifying the inverted U-shaped relationship. Consequently, our evidence contributes to the literature on IUR alliances and firm innovation performance, suggesting that medium levels of IUR alliance portfolio breadth and depth in SMEs result in higher firm innovation performance, thereby, offering several useful insights for both SME managers and policymakers in emerging economies.