Title: Can SMEs improve their innovation through a coopetition strategy? Evidence from Iranian IT SMEs

Authors: Farzad Ghasemian; Ata Harandi

Addresses: Department of Business Management, Islamic Azad University Tehran North Branch, Hakimiye, Tehran, Iran ' Department of Strategy and Business Policy, Faculty of Business Management, University of Tehran, Tehran, Iran

Abstract: Conducted in two vital dimensions, this study investigates the influence of coopetition (cooperative competition) on innovation in business processes and products within small and medium-sized knowledge-based enterprises (SMEs). In the initial dimension, the evaluation focuses on the general influence of coopetition on innovation, regardless of shared resources between SMEs; in the second dimension, the research delves more profoundly into the contribution of coopetition to innovation, with a specific emphasis on knowledge management and knowledge resources shared between them. We employed structural equation modelling on a sample of 265 senior managers from 167 knowledge-based SMEs operating in the information technology sector in Tehran. The analysis revealed that coopetition alone, regardless of resource sharing, does not lead to increased innovation in such companies. Conversely, the results indicated that coopetition, when channelled through the sharing of knowledge resources, can elevate innovation levels in this type of company. Furthermore, the findings highlighted that a higher level of social capital among partners in this type of relationship positively influences coopetition.

Keywords: coopetition; innovation; SME; social capital; knowledge transfer; B2B partnership; strategic alliance.

DOI: 10.1504/MEJM.2025.145891

Middle East Journal of Management, 2025 Vol.12 No.3, pp.261 - 285

Received: 04 Jun 2023
Accepted: 21 Nov 2023
Published online: 30 Apr 2025 *

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