Abstract/Summary

This study focuses on the impact of knowledge collaboration and knowledge spillovers on the innovative performance of Schumpeterian-type firms. Building on the innovation and entrepreneurship literatures, it first examines the innovation strategies used by highly-innovative firms, which can involve knowledge spillovers, knowledge collaborations or both. Secondly, it demonstrates how and why the relationship between knowledge flows and innovative performance changes with geographical proximity between knowledge-source and knowledge-recipient firms and across industries. External collaboration may bestow a significant advantage for innovation, such as helping to leverage the lack of knowledge and technology and teaching skills, but at a cost – the involuntary knowledge outflows to external partners. The results have relevant implications for the academic community, national and European policy-makers, and managers in highly-innovative firms who may want to rethink their innovation strategy.