Cooperating with external partners: The importance of diversity for innovation performance

Innovations are rarely generated in complete isolation. Due to the inherent uncertainty, the manifold underlying knowledge base and high financial investments, firms seek to integrate external partners for the generation of new products and processes. However there is an ongoing debate whether firms, which develop their innovations in close cooperation with external partners, such as suppliers, customers and governmental research institutions, can benefit with respect to innovation performance in contrast to firms which cooperate less. This paper aims at investigating how diversity in cooperation partners effects the firms' output innovation performance in terms of generated sales with innovative products. To address this question the authors analyze a large-scale sample of microdata from Swiss firms derived from four waves (1999, 2002, 2005, and 2008) of the Swiss innovation survey data according to the European Community Innovation Survey, applying a panel data analysis. The findings suggest, that firms with a higher diversity in cooperation partners could benefit in generating new product innovations