Business networks and innovation in SMEs and large firms of a developing country

We explore the effects of formal and informal links on innovation outcomes as well as their interaction with size and internal coordination capacity of the firm. The research also contributes to the debate about the effects of public and private links on innovation in SMEs and large firms. We use data for 4,820 firms in Colombia, and ZIP models, since a large proportion of firms report zero innovations. Results indicate that both formal and informal links are important determinants of the innovation performance. Internal coordination capacity and firm size moderate the relationship between informal network links and innovation outcomes. Evidence shows that public formal links are important for determining SMEs innovation results, but are not significant for large firms.