The impact of collaboration networks on technological innovation in firms

Latin American manufacturing firms must develop innovations to be competitive. For this reason, this research has two objectives: first, to analyze how connections with customers, suppliers, competitors, and research institutes are related to absorptive capacity, and, second, to demonstrate the existing relationship between absorptive capacity and technological innovation. A theoretical model was developed to show the relationship among the variables. The structural equation modelling was applied through AMOS software to a sample of 1,098 Peruvian manufacturing firms that participated in the second national innovation survey carried out in 2015. This study contributes to the literature on how firms relate with collaboration networks to improve their innovation capacity. In this way, firms obtain knowledge by applying the inbound open innovation approach. This knowledge is processed through each firm's absorptive capacity and will improve its innovation capacity. Low or medium-low tech manufacturing firms that make investments in machinery, hardware, and software are more able to carry out product and process innovations. Product innovations allow firms to maintain or increase their position in the market and have more satisfied customers, while process innovations reduce their operating costs and make them more efficient.