Cooperation as a strategy to overcome firm´s innovation barriers – the case of German manufacturing firms

Abstract

The main aim of this paper is to analyze the probability of firms collaborate with other partners as a means to overcome their innovation barriers. Firm’s encounter numerous obstacles in their quest to be innovative and competitive, these innovation barriers prevents them from introducing new services and products to the market, adopting new technologies, and obstructs firms overall competitiveness. Firm’s internal and external collaborations can help them to overcome difficult business challenges and barriers such as shortage of skilled personnel, and high cost of accessing new markets etc. For this kind of analysis, the probit regression model is mostly used. Our results have pointed out that those barriers to firm’s innovation push them to collaborate in the market environment. Firms encountering innovation barriers valued their cooperation within the enterprise group, with clients and customers and with other competitors than with institutions such as universities and public research institutions. Our paper contributes to the burgeoning literature on innovation as it examines how firms put in cooperation strategies to mitigate those barriers. An important contribution of our research is the definition of the role of public institutions, public policy and public funding to remove barriers to innovative activities in a market environment.