The Impact of External Collaborations on Firm Innovation Performance: Evidence from Turkey

Abstract

This paper aims to understand the impact of collaborations on the firm innovation performance. Although some of the previous studies support that external collaborations of firms improves their innovation capabilities, our knowledge on the impact of collaborations on firm innovation performance is still limited. In this research, using innovation survey carried out by Turkish Statistical Institute in 2009 to measure the innovation activities of firms in Turkey between 2006 and 2008, we aim to understand how collaborations influence the innovation performance of firms. We introduce a new indicator to measure the innovation performance of firms which is simply based on the perception of firms regarding to the impacts of innovation. In order to create performance indicators we conducted a factor analysis to group the firms’ perceptions on the impacts of innovation. Factor analysis gives us two basic impact of innovation: product and process oriented impacts of innovation. We find out a positive relationship between external collaboration and product oriented impacts of innovation. In other words, firms engaged in external collaboration during the innovation process observe better improvements in their products and markets. External collaboration also brings improvements to the production process of firms.