Determinants of R&D Cooperation in Small and Medium-Sized Enterprises

We investigate the determinants of R&D cooperation in small and medium-sized enterprises (SMEs). Using firm-level data from the 2002 Korean Innovation Survey and applying a probit model with sample selection, we find that incoming spillovers of knowledge have a significant and positive impact on SMEs¡¯ decisions to engage in R&D cooperation. In particular, the effect of knowledge spillovers on R&D cooperation is much larger for smaller firms. Despite the importance of external knowledge for SMEs, the estimation results suggest that SMEs may be at a disadvantage in establishing external R&D linkages because of their absolute size limitations.