Co-opetition and small and medium-sized enterprises (SMEs)

Abstract

Co-opetition, a portmanteau of cooperation and competition, is not an unusual practice. Prior studies show that co-opetition can improve firms’ innovation performance. However, previous research has yet to investigate which factors determine co-opetition in the SMEs’ context. The goal of this study is to investigate the determinants of SMEs’ co-opetition. The fundamental argument of the paper is that SMEs’ size has a negative association with the likelihood of co-opetition while SMEs’ past collaboration experience has a positive relationship with the propensity of co-opetition. Specifically, smaller firms tend to employ co-opetition because of their strategic and technology alignment with others in the same industry. Additionally, SMEs with greater levels of accumulated alliance managing experience are likely to show higher levels of co-opetition engagement. Drawing upon data from 2016 Korean Innovation Survey, the results from the probit models support the theoretical model. Further, implications and directions for future study are discussed.