This paper examines the effects of two R&D network formation strategies, namely, R&D outsourcing and collaboration on their innovation performance. To date, the effects of each strategy have been separately analyzed, although firms commonly use mixed strategies of R&D outsourcing and collaboration. A Tobit model is employed to analyze the determinants of innovation performance using an empirical case of 4,722 Korean R&D firms. The empirical findings confirm that R&D outsourcing has an inverted‐U relationship with innovation performance; thus, a proper level of R&D outsourcing(in this research, 31.5%) is essential. R&D collaboration also tends to raise innovation performance. These results give small–medium firms useful insights into how their innovation performance can be maximized by properly mixing these two strategic options.
Keywords : Innovation performance, R&D outsourcing, R&D collaboration, Korean firms