Small and Medium-Sized Enterprises (SMEs) face tremendous challenges in their attempt to pursue technological innovations. This paper argues that co-opetition strategy-simultaneous pursuit of competition and collaboration-helps SMEs to develop their ability to effectively pursue technological innovations. We developed a multilevel conceptual model consisting of factors at the industry, dyadic, and firm level to understand the drivers of co-opetition and discuss benefits and costs of co-opetition for SMEs. We believe that this paper will stimulate future conceptual and empirical research on this important topic and has implications for SME managers and policymakers.
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