Cognitive proximity and innovation performance: are collaborators equal?

This paper combines the concepts of search depth and cognitive proximity to investigate the impact of intense collaboration with different external agents on firms' innovation performance. It empirically tests whether firms that draw deeply on cognitively proximate collaborative partners are more innovative than those collaborating intensively with cognitively distant partners. It explores whether the impact of each external agent is equally important in determining the innovation output of firms.

Using data from the Irish Community Innovation Survey 2012–2014, this paper employs a probit model to empirically test the impact of collaboration with cognitively proximate and distant sources of external knowledge to establish whether their impact on innovation performance is uniform.

The results show that not all collaborators equally impact firm innovation performance. Firms who indicate that knowledge sourced from backward linkages with suppliers is highly important are more likely to engage in both product and process innovation, with the effect more pronounced for the former. The extent of this is greatest for backward linkages compared to forward, horizontal and public linkages. Public linkages have the weakest impact on innovation output which raises questions from a policy perspective given the focus on university–industry collaboration for innovation. The findings indicate that collaboration with cognitively proximate sources of knowledge benefits firms' innovation output.

The study provides empirical evidence on the role of intense collaboration with cognitively proximate and distant external knowledge sources to explore their impact on the subsequent innovation performance of firms. The results can be used to help shape firm-level innovation policy, and indeed national policy, to promote innovation performance.