Asian Journal of Innovation and Policy

Asian Society for Innovation and Policy (아시아기술혁신학회)
권호 표지
DOI QR코드

DOI QR Code

Network Cooperation, Innovation, Internationalization and Economic Performance of SMEs: An Exploratory Study

  • Received : 2018.11.09
  • Accepted : 2018.12.24
  • Published : 2018.12.31
Download PDF
⟨ Previous Next ⟩

Abstract

This paper explores the relationship between network cooperation, innovation, internationalization and economic performance of manufacturing small and medium enterprises (SMEs) of engineering goods industry located in Bangalore city, India. At the outset, it is observed that SMEs receive the maximum assistance in the realm of product specifications. Moreover, they do not resort to manufacturing new products as much as they resort to product modifications or process improvements. Further, it is found (using Chi-square test of independence) that higher the network assistance received from an external network, greater is the innovation performance of SMEs. Subsequently, using analysis of variance (ANOVA), export intensity (proxy for internationalization performance) of SMEs is found to have a significant positive association with both the degree of their network cooperation and of their innovation performance. Lastly, it is observed that higher the degree of each of network cooperation, innovation performance and internationalization performance, better is the economic performance (measured by total sales turnover) of SMEs. These results have significant implications for the policy makers of the country to give due attention to network cooperation, innovation and internationalization as the means of enhancing the economic performance of SMEs.

Keywords

GSHSS5_2018_v7n3_461_f0001.png 이미지

Figure 1 Network cooperation, innovation, internationalization and economic performance of SMEs

Table 1 Distribution of sample firms based on type of products

GSHSS5_2018_v7n3_461_t0001.png 이미지

Table 2 Description of interaction frequency scores with network participants

GSHSS5_2018_v7n3_461_t0002.png 이미지

Table 3 Descriptive statistics of network assistance

GSHSS5_2018_v7n3_461_t0003.png 이미지

Table 4 Distribution of firms based on the degree of network assistance

GSHSS5_2018_v7n3_461_t0004.png 이미지

Table 5 Descriptive statistics of innovation variables

GSHSS5_2018_v7n3_461_t0005.png 이미지

Table 6 Distribution of firms based on the degree of innovation performance

GSHSS5_2018_v7n3_461_t0006.png 이미지

Table 7 Descriptive statistics of internationalization variables

GSHSS5_2018_v7n3_461_t0007.png 이미지

Table 8 Contingency table: network assistance and innovation performance

GSHSS5_2018_v7n3_461_t0008.png 이미지

Table 9 Chi-square results for network assistance and innovation performance

GSHSS5_2018_v7n3_461_t0009.png 이미지

Table 10 Robust tests of equality of means for export intensity across levels of network cooperation

GSHSS5_2018_v7n3_461_t0010.png 이미지

Table 11 Post-hoc multiple comparisons using Games-Howell test for export intensity across levels of network assistance

GSHSS5_2018_v7n3_461_t0011.png 이미지

Table 12 One-Way ANOVA table for export scope

GSHSS5_2018_v7n3_461_t0012.png 이미지

Table 13 One-Way ANOVA for export speed

GSHSS5_2018_v7n3_461_t0013.png 이미지

Table 14 Robust tests of equality of means for export intensity across categories of innovation performance

GSHSS5_2018_v7n3_461_t0014.png 이미지

Table 15 Post-hoc multiple comparisons using Games-Howell test for export intensity across categories of innovation performance

GSHSS5_2018_v7n3_461_t0015.png 이미지

Table 16 One-Way ANOVA for export scope across categories of innovation performance

GSHSS5_2018_v7n3_461_t0016.png 이미지

Table 17 One-Way ANOVA for export speed across categories of innovation performance

GSHSS5_2018_v7n3_461_t0017.png 이미지

Table 18 Robust tests of equality of means for sales turnover across categories of network cooperation

GSHSS5_2018_v7n3_461_t0018.png 이미지

Table 19 Post-hoc multiple comparisons using Games-Howell test for sales turnover across categories of network cooperation

GSHSS5_2018_v7n3_461_t0019.png 이미지

Table 20 One-Way ANOVA for sales turnover across categories of innovation performance

GSHSS5_2018_v7n3_461_t0020.png 이미지

Table 21 Post-hoc multiple comparisons using Tukey’s HSD test for sales turnover across categories of innovation performance

GSHSS5_2018_v7n3_461_t0021.png 이미지

Table 22 Correlation: internationalization performance and sales turnover

GSHSS5_2018_v7n3_461_t0022.png 이미지

References

  1. Bala Subrahmanya, M.H. (2015) Innovation and growth of engineering SMEs in Bangalore: why do only some innovate and only some grow faster? Journal of Engineering and Technology Management, 36, 24-40. https://doi.org/10.1016/j.jengtecman.2015.05.001
  2. Caldera, A. (2010) Innovation and exporting: evidence from Spanish manufacturing firms, Review of World Economics, 146(4), 657-689. https://doi.org/10.1007/s10290-010-0065-7
  3. Cassiman, B. and Martinez-Ros, E. (2007) Product innovation and exports: evidence from Spanish manufacturing, Barcelona: IESE Working Paper, 1-36.
  4. Chiao, Y.C., Yang, P.K. and Yu, C.M.J. (2006) Performance, internationalization, and firm-specific advantages of SMEs in a newly-industrialized economy, Small Business Economics, 26(5), 475-492. https://doi.org/10.1007/s11187-005-5604-6
  5. Coad, A. and Rao, R. (2008) Innovation and firm growth in high-tech sectors: a quantile regression approach, Research Policy, 37(4), 633-648. https://doi.org/10.1016/j.respol.2008.01.003
  6. Cohen, W.M. and Levinthal, D.A. (2000) Absorptive capacity: a new perspective on learning and innovation, Strategic Learning in a Knowledge Economy, 39-67.
  7. Damijan, J.P., Kostevc, C. and Polanec, S. (2010) From innovation to exporting or vice versa?, World Economy, 33(3), 374-398. https://doi.org/10.1111/j.1467-9701.2010.01260.x
  8. Ebersberger, B. and Herstad, S.J. (2013) The relationship between international innovation collaboration, intramural R&D and SMEs' innovation performance: a quantile regression approach, Applied Economics Letters, 20(7), 626-630. https://doi.org/10.1080/13504851.2012.724158
  9. Engel, D., Rothgang, M. and Trettin, L. (2004) Innovation and their impact on growth of SME-Empirical evidence from craft dominated industries in Germany, EARIE 2004 Conference, September, 2-5.
  10. Fischer, M.M. and Varga, A. (2002) Technological innovation and interfirm cooperation: an exploratory analysis using survey data from manufacturing firms in the metropolitan region of Vienna, International Journal of Technology Management, 24(7-8), 724-742. https://doi.org/10.1504/IJTM.2002.003080
  11. Girma, S., Gorg, H. and Hanley, A. (2008) R&D and exporting: a comparison of British and Irish firms, Review of World Economics, 144(4), 750-773. https://doi.org/10.1007/s10290-008-0168-6
  12. Golovko, E. and Valentini, G. (2011) Exploring the complementarity between innovation and export for SMEs' growth, Journal of International Business Studies, 42(3), 362-380. https://doi.org/10.1057/jibs.2011.2
  13. Gronum, S., Verreynne, M.L. and Kastelle, T. (2012) The role of networks in small and medium‐sized enterprise innovation and firm performance, Journal of Small Business Management, 50(2), 257-282. https://doi.org/10.1111/j.1540-627X.2012.00353.x
  14. Hall, L.A. and Bagchi-Sen, S. (2007) An analysis of firm-level innovation strategies in the US biotechnology industry, Technovation, 27(1-2), 4-14. https://doi.org/10.1016/j.technovation.2006.07.001
  15. Hymer, S.H. (1976) The International Operations of National Firms, MIT Press.
  16. Kafouros, M.I., Buckley, P.J., Sharp, J.A. and Wang, C. (2008) The role of internationalization in explaining innovation performance, Technovation, 28(1-2), 63-74. https://doi.org/10.1016/j.technovation.2007.07.009
  17. Kanter, R. (1985) Supporting innovation and venture development in established companies, Journal of Business Venturing, 1(1), 47-60. https://doi.org/10.1016/0883-9026(85)90006-0
  18. Keeble, D. and Wilkinson, F. (2017) High-Technology Clusters, Networking and Collective Learning in Europe, Routledge.
  19. Kostopoulos, K., Papalexandris, A., Papachroni, M. and Ioannou, G. (2011) Absorptive capacity, innovation, and financial performance, Journal of Business Research, 64(12), 1335-1343. https://doi.org/10.1016/j.jbusres.2010.12.005
  20. Leonidou, L.C. (2004) An analysis of the barriers hindering small business export development, Journal of Small Business Management, 42(3), 279-302. https://doi.org/10.1111/j.1540-627X.2004.00112.x
  21. Love, J.H. and Roper, S. (2015) SME innovation, exporting and growth: a review of existing evidence, International Small Business Journal, 33(1), 28-48. https://doi.org/10.1177/0266242614550190
  22. Lu, J.W. and Beamish, P.W. (2001) The internationalization and performance of SMEs, Strategic Management Journal, 22(6-7), 565-586. https://doi.org/10.1002/smj.184
  23. Lumiste, R., Lumiste, R. and Kilvits, K. (2004) Estonian manufacturing SMEs innovation strategies and development of innovation networks, 13th Nordic Conference on Small Business Research, June, 10-12.
  24. McDougall, P.P. and Oviatt, B.M. (1996) New venture internationalization, strategic change, and performance: a follow-up study, Journal of Business Venturing, 11, 23-40. https://doi.org/10.1016/0883-9026(95)00081-X
  25. Mlinari, M.C. and Mlinari, F. (2003) Small firms in a small country: managerial factors, internationalization and performance of Slovenian SMEs, Managing Global Transitions, 8(3), 239-259.
  26. Morgan, R.E. and Katsikeas, C.S. (1997) Theories of international trade, foreign direct investment and firm internationalization: a critique, Management Decision, 35(1), 68-78. https://doi.org/10.1108/00251749710160214
  27. Najafi Tavani, S., Sharifi, H. and Ismail, S.H. (2013) A study of contingency relationships between supplier involvement absorptive capacity and agile product innovation, International Journal of Operations and Production Management, 34(1), 65-92. https://doi.org/10.1108/IJOPM-09-2011-0331
  28. Nakwa, K., Zawdie, G. and Intarakumnerd, P. (2012) Role of intermediaries in accelerating the transformation of inter-firm networks into Triple Helix networks: a case study of SME-based industries in Thailand, Procedia-Social and Behavioral Sciences, 52, 52-61. https://doi.org/10.1016/j.sbspro.2012.09.441
  29. Oke, A., Burke, G. and Myers, A. (2007) Innovation types and performance in growing UK SMEs, International Journal of Operations and Production Management, 27(7), 735-753. https://doi.org/10.1108/01443570710756974
  30. Pagano, P. and Schivardi, F. (2003) Firm size distribution and growth, Scandinavian Journal of Economics, 105(2), 255-274. https://doi.org/10.1111/1467-9442.t01-1-00008
  31. Pangarkar, N. (2008) Internationalization and performance of small and medium sized enterprises, Journal of World Business, 43, 475-485. https://doi.org/10.1016/j.jwb.2007.11.009
  32. Pla-Barber, J. and Alegre, J. (2006) Analysing the link between export intensity, innovation and firm size in a science-based industry, International Business Review, 16(3), 275-293. https://doi.org/10.1016/j.ibusrev.2007.02.005
  33. Roper, S. (1997) Product innovation and small business growth: a comparison of the strategies of German, UK and Irish companies, Small Business Economics, 9(6), 523-537. https://doi.org/10.1023/A:1007963604397
  34. Sammarra, A. and Biggiero, L. (2008) Heterogeneity and specificity of Inter-Firm knowledge flows in innovation networks, Journal of Management Studies, 45(4), 800-829 https://doi.org/10.1111/j.1467-6486.2008.00770.x
  35. Stinchcombe, A.L. and March, J.G. (1965) Social structure and organizations, Handbook of Organizations, 7, 142-193.
  36. Tavani, S.N., Sharifi, H. and Ismail, S.H. (2013) A study of contingency relationships between supplier involvement, absorptive capacity and agile product innovation, International Journal of Operations and Production Management, 34(1), 65-92. https://doi.org/10.1108/IJOPM-09-2011-0331
  37. Veryzer, R.W.Jr. (1998) Discontinuous innovation and the new product development process, Journal of Product Innovation Management, 15(4), 304-321. https://doi.org/10.1016/S0737-6782(97)00105-7
  38. Whitley, R. (2002) Developing innovative competences: the role of institutional frameworks, Industrial and Corporate Change, 11(3), 497-528. https://doi.org/10.1093/icc/11.3.497
  39. Yip, G.S., Biscarri, J.G. and Monti, J.A. (2000) The role of the internationalization process in the performance of newly internationalizing firms, Journal of International Marketing, 8(3), 10-35. https://doi.org/10.1509/jimk.8.3.10.19635
  40. Zaheer, S. and Mosakowski, E. (1997) The dynamics of the liability of foreignness: a global study of survival in financial services, Strategic Management Journal, 18(6), 439-463. https://doi.org/10.1002/(SICI)1097-0266(199706)18:6<439::AID-SMJ884>3.0.CO;2-Y

Cited by

  1. Internationalization Business Models and Patterns of SMEs and MNEs: A Qualitative Multi-Case Study in the Agrifood Sector vol.11, pp.10, 2018, https://doi.org/10.3390/su11102755
  2. The effect of industry-specific networking behaviour on the internationalization performance of Czech SMEs vol.33, pp.2, 2021, https://doi.org/10.1108/ebr-10-2019-0244