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The external technology collaboration network is of importance to increasing the performances in the technology development of the small and medium-sized enterprises (SMEs). This study focuses especially on the influence of the external technology collaboration network diversity on SMEs’ production process improvement and cost reduction through technology development and the moderating effect of SMEs’ use of the external information on this influence. This study sheds a new light on the three points based on the empirical analysis of the 2,000 data from South Korean SMEs by using the ordinary least squares regression. First, SMEs’ external technology collaboration network diversity has a positive effect on their cost reduction through technology development. Second, SMEs’ production process improvement through technology development partially mediates this positive effect of the external technology collaboration network diversity on the cost reduction. Third, the use of the external information for technology development moderates the effects of SMEs’ external technology collaboration network diversity on the production process improvement and the cost reduction.
