This study empirically analyzed the effects of cooperative network characteristicson firm performance within the industrial agglomeration of Busan, the center of South Korea's footwear industry. The cooperative network was categorized into fourfactors...
This study empirically analyzed the effects of cooperative network characteristicson firm performance within the industrial agglomeration of Busan, the center of South Korea's footwear industry. The cooperative network was categorized into fourfactors—awareness, strength, openness, and internal supportiveness—and theirimpacts on product innovation, process innovation, and financial performance wereexamined. Furthermore, this study investigated the moderating role of theinnovation capability of the industrial cluster in these relationships. For thisresearch, a survey was conducted with 207 employees from companies within the Busan footwear industrial agglomeration. The collected data was analyzed using SPSS for factor analysis, reliability analysis, multiple regression analysis, andhierarchical regression analysis.
The analysis revealed that network awareness and strength had a statisticallysignificant positive effect on both product and process innovation. This indicatesthat innovation activities, such as technology development and processimprovement, are more actively pursued when firms clearly recognize the existenceand capabilities of other entities within the agglomeration and maintain strong,trust-based relationships. In contrast, network openness and internal supportivenessdid not show a significant impact on product innovation or financial performance.
For process innovation, internal supportiveness had a positive effect, whereasopenness had a negative effect. This suggests that in an industry sensitive totechnology leakage, excessive openness without established trust may increasetransaction costs and hinder process efficiency. Additionally, the innovationcapability of the industrial cluster was found to partially moderate the relationshipbetween the cooperative network and firm performance. Significant moderatingeffects were observed across all dimensions: product innovation, process innovation,and financial performance. Specifically, significant interactions were found fornetwork awareness on product innovation, for internal supportiveness on processinnovation, and for network openness and internal supportiveness on financialperformance. This implies that the effectiveness of individual firms' cooperativeactivities in translating into tangible outcomes is enhanced when the overall R&Dinfrastructure and technological network of the industry are well-established.
Consequently, for the Busan footwear industry to secure sustainablecompetitiveness, it is necessary to shift from simple network expansion to thequalitative deepening of trust-based internal cooperation. To ensure that inter-firmcollaboration leads to continuous innovation, it is essential to enhance mutualawareness and relationship strength while building practical systems for technologysupport and information sharing. Furthermore, in parallel with strengtheninginternal corporate capabilities, the innovation infrastructure of the agglomerationmust be systematically expanded. This includes reinforcing joint R&D, providingsupport for technology demonstration and certification, sharing equipment andfacilities, and implementing personnel exchange programs. When cooperativenetworks are activated upon such a structural foundation, the Busan footwearindustry can evolve from a production-centered industrial agglomeration into asustainable, innovation-driven ecosystem.