Collaboration Strategies and SME Innovation Performance

•Large firms and small and medium-sized enterprises (SMEs) benefit from knowledge collaboration with external partners, with the returns to collaboration are higher for SMEs.•The type of collaboration partner and their geographical proximity predict innovation performance in SMEs.•Knowledge collaboration with suppliers and customers domestically and internationally facilitates innovation in SMEs.•Knowledge collaboration with universities domestically increases innovation in SMEs.•Knowledge collaboration with competitors internationally is conducive for increases innovation in SMEs.