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Analysis of SMEs partner proximity preferences for process innovation

Kristina Jespersen (), Damiana Rigamonti, Morten Jensen and Rune Bysted
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Kristina Jespersen: Aarhus BSS, Aarhus University
Damiana Rigamonti: Aarhus BSS, Aarhus University
Rune Bysted: Aarhus BSS, Aarhus University

Small Business Economics, 2018, vol. 51, issue 4, 879-904

Abstract: Abstract This paper explores small and medium enterprises’ (SMEs) proximity preferences when selecting partners for collaborative process innovation. Drawing on a survey of 362 Danish SMEs, we address four partner proximity characteristics: geographic, cognitive, organizational, and social. The results show that SMEs prioritize geographic openness over regional clustering. Furthermore, to simultaneously facilitate collaboration and ensure innovation, firms tend to collaborate with partners that are characterized by cognitive similarity at a technological level and knowledge distance at a market level. Technological proximity is also found to be more relevant than social proximity when it comes to bridging the potential geographic and market distance between the collaborative partners. Finally, the results indicate that the tendency of organizational proximity to facilitate informal interactions with partners enhances process innovation only at two of four process innovation levels. Thus, the results highlight the fact that the value of partner proximity characteristics change with the level of process innovation considered.

Keywords: Process innovation; Proximity; Partner collaboration (search for similar items in EconPapers)
JEL-codes: L26 O31 O18 O38 (search for similar items in EconPapers)
Date: 2018
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