External Collaboration and Innovation Performance of SMEs: The Moderation of Government Institutional Support in Chinese Context

Abstract

External collaboration is important for firms' innovation performance, especially for small and medium-sized enterprises (SMEs) in China. The purpose of this study is to investigate the relationships between two types of external collaboration (firm-firm collaboration and firm-university & research institute collaboration) and innovation performance of SMEs in the Chinese context and how these relationships can be moderated by an important external environment factor-government institutional support. Survey data from 214 manufacturing SMEs in China were used to test the proposed model through hierarchical regression analysis. The results showed that both firm-firm collaboration and firm-university & research institute collaboration are positively related to innovation performance of SMEs, and firm-university & research institute collaboration offers greater benefits than firm-firm collaboration. Furthermore, this study found that government institutional support positively moderates the relationships between two types of external collaboration (firm-firm collaboration and firm-university & research institute collaboration) and innovation performance of SMEs.