Co-operative ties and innovation: Some new evidence for UK manufacturing

Abstract

Drawing upon survey data from 436 firms, this paper explores the impact of co-operative ties upon levels of innovation (both product and process) in five UK manufacturing industries. Unlike a number of previous studies in this area, the data itself captures both the scale and multi-dimensional nature of both co-operation and innovation. The paper finds evidence to support the hypothesis that vertical co-operative ties are a significant factor in explaining firms’ levels of innovative performance. However, the empirical analysis suggests that it is the strength of such ties – and not just their existence – which are important with stronger dyadic relations between firms having a positive and significant impact upon levels of innovation. The analysis also finds that in some sectors, horizontal co-operative ties are (albeit to a lesser extent) also important.