Although the role of research and development (R&D) is seen as one of the main sources of innovation, it is also clear that this is not the only contributory factor. The innovation process is also the result of specific combinations of knowledge that firms obtain by accessing both the internal and the external environments. In this context, one way for businesses to promote innovation it is through knowledge networks. It is the relevance of these networks in the innovation process that is the focus of this paper. There are three main objectives: firstly, we identify the most important interaction channels used by firms and analyze the mechanisms that underlie these channels with regard to their formal and informal nature. Secondly, we study the relationship between networking intensity and the innovation process. Finally, we analyze the relationship between knowledge networks, the innovation process and firm performance. Our results show that firms that engage more intensively in knowledge networks increase the likelihood of obtaining higher levels of innovation output and better economics performance. The key finding shows the importance of informal interaction mechanisms in the firms´ innovation process.

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innovation process, knowledge networks, firm performance, interaction channels, formal and informal interaction mechanisms, Portugal.