Piotr Dzikowski PhD Piotr Dzikowski University of Zielona Góra, Faculty of Economics and Management Marek Tomaszewski PhD Marek Tomaszewski University of Zielona Góra, Faculty of Economics and Management The impact of firm size and its ownership on innovation cooperation in medium-high and high technology sectors in Poland 1. Introduction The innovation has become a widely recognized industry standard over past 30 years. As a result of it not only product life cycle has been shortened, but also many industries have gone global (Grudzewski, Hajduk 1999, p. 37). The importance of innovation in shaping the socio-economic development of countries, regions and sectors is steadily growing (Janasz 2009, p. 260). It is common knowledge that innovation activity occurs not only inside the company but also outside. The important role in this process play external institutions such as competitors, universities and R&D units and government institutions. They contribute to new innovative products and services or take part in value creation (Norman, Ramirez 1993, pp. 65-77). Initially large companies and imperfect competition were presumed to be the key factors behind innovation (Schumpeter 1960, p.50; Stone, Schwartz 1975, pp. 1-37). Later small and medium companies were believed to have the highest level of innovation potential (Drucker 1992, p.20). There are many empirical evidences for a positive relation between innovation activities and firm size (Dachs, Ebersberger, Pyka 2008, pp. 200-229). Large firms are more likely to carry out internal innova- tive activities and, at the same time establish cooperation partnerships, while small firms choose to carry out exclusively internal innovative activities, or to buy them externally (Veugelers and Cassiman 1999, pp.63‐80). The decision to cooperate to innovate depends on the characteristics of the industry. The industrial sector variable plays an important role in the process of understanding the behavioral dimensions of the firms. The probability of innovation cooperation concerns technological opportuni- ties of the firms and the accumulation of expertise (Tether, 2002, pp. 947‐967). Firm size and it ownership apart from affecting innovation activity may have effect on innovation cooperation, but it depend on external environment. Large companies are responsible for the whole economy innovation especially in underdeveloped countries where the number of entrepreneurs is quite low (Janasz 2005, pp. 133-174). In this kind of economy, the share of large companies representing high technology is also low (<5%), which directly translates into a small share of high technology products in international trade. This is particularly disadvantageous, because international exchange significantly affects the flow of new technologies and their implementation in national companies (Woodward 2005, p.4). Firm size affects the pace of innovative processes’ initiation (Damanpour 1992, p. 375). Recent research shows that large companies are supported by public funds more often than other kind of enterprises to accelerate the creation of solutions that affect all market. Whereas supporting SMEs help to introduce new solutions, which are limited to the given company (Herrera, Sánchez-Gonzalez 2013, pp. 137-155 ). According to A.N. Link (1980, pp. 771-782) large enterprises gain innovation supremacy in markets with imperfect competition, but small ones are much more agile and have higher innovation advantage in markets with higher level of competition. The basic element of the concept of "innovation environment" (Aydalot, Keeble 1988, p. 51) is an innovation collaboration, which plays an important role in the flow of knowledge. It is a foundation in the theory of growth (Porter 1998, pp. 77-90) and the concept of national, regional and sectoral innovation systems (Lundvall 1992, pp. 1-19; Cooke, Uranga, Gomez 1997, pp. 475-491). It is also a