Small firms' innovation in two technological settings☆

Abstract This paper explores the relationships between the technological acquisition strategies of small firms and innovation in the Korean electronics industry. Its thesis is that small firms' technology strategies and their effects on the rate of innovation differ according to new or traditional technology settings. A primary finding of this study is that in-house R&D and technical linkages with buyers and suppliers have stronger effects on radical innovation in a new technology setting than in a traditional technology setting. The findings of the study provide insight for interpreting some inconsistent results of recent research into the importance of external linkages to innovation. They also suggest some implications of small firms' strategies and public policies for accelerating technological innovation.

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