The role of cooperative R&D in innovation performance of SMEs: evidence from South Korean materials, parts, and equipment firms

Abstract

ABSTRACT Can cooperative R&D between SMEs and other organisations enhance innovation performance? This study utilises a mixed-methods approach to examine the impact of voluntary cooperative R&D and gain an improved understanding of the mechanisms that facilitate innovation outcomes. The analysis uses a firm-level secondary dataset from South Korea’s M-P-E industry for the period between 2005 and 2020, as well as in-depth expert interviews. The findings indicate that collaboration between SMEs, universities, and government research institutes (GRI)s positively impacts innovation performance. The expert interviews confirm that partnerships with academic institutions and research organisations help bridge the gap between creating key innovations and their commercialisation. The results also show that government R&D support facilitated collaborations between suppliers and buyers, which in turn led to improved innovation outcomes. This implies that providing R&D subsidies to SMEs could be a useful strategy for governments seeking to bolster their technological innovation. Policy implications are further discussed in the conclusion.