No abstract

The "open innovation" model is currently being touted as a superior path for achieving long-term success. Rather than relying on their own, limited resources for research and development in the traditional, closed invention system, firms are encouraged to share knowledge across firm boundaries to enhance their innovative potential. Yet, such sharing may also have adverse consequences by reducing the rarity of a firm's inventions. This paper accordingly attempts to identify and analyze the parameters that determine whether open or closed types of innovation management are most appropriate for a given firm. Following a contingency perspective, we examine these determinants as various internal and external constraints (situational factors). More specifically, applying concepts related to absorptive capacity, complementary resources, game theory and others, we derive testable propositions and provide case study evidence regarding the value generating properties of open innovation.

In the existing literature on innovation, financial services firms are attributed with a dependence on external knowledge inputs. Meanwhile, relative importance of sources of knowledge for innovation, modes of knowledge inflow, cooperation partners, advantages and disadvantages of cooperation for innovation remain underexplored. This study has unveiled that the most important internal sources of knowledge for innovation in financial services are frontline employees, new service development teams, bank executives, and backstage staff. Highly valuable modes of knowledge inflow for innovation are human resource development, purchase of equipment, and informal personal interactions. Financial services firms benefit from cooperation for innovation with external partners in the following aspects: increase in customer satisfaction, developed new skills of employees, new technologies, access to knowledge and expertise, decreased costs, and finding a new approach to solve a problem. Costs associated with external cooperation for innovation remain the most influential disadvantage of this mode of inbound open innovation.

The importance of collaboration has been one of the main issues in innovation studies. Despite many different findings on collaboration and its impact on innovation performance, the impact of different types of collaboration on different types of innovation is still inconclusive. The purpose of this research is to investigate the effects of openness on the performance of the innovation process in a leading emerging economy. Cooperation with partners and their effects on innovation propensity unveil that process, marketing and organisational innovations are determinants of product and service innovation, thus confirming that the various innovation types are intertwined and mutually supporting each other. From a geographical perspective, cooperating with external parties from the same country plays a dominant role in determining the innovation outcome. Cooperating with consultants and private labs on the other hand seems to negatively affect innovation performance. Surprisingly, the role of foreign cooperation remains ambiguous as results were not statistically significant.

It is self-evident that financial innovation is a key player in the contemporary economy. However, its significant importance has largely been overlooked in innovation studies. To fill up this gap, and through an interdisciplinary approach, this article details a research agenda for innovation in financial services. It reviews the 'what', 'why' and 'how' of financial innovation in order to clarify all the ambiguities surrounding its nature, creation, purpose and impact. Specifically, the article investigates its definition and distinguishing features, its key determinants, its supporting processes, and finally its effects, mainly at firm-level. Therefore, the article opens the black box of financial innovation and uncovers its peculiarities in order to understand how it occurs when innovation is considered both as an 'outcome' of financial innovation and a 'process' supporting its creation.