Exploring the impact of open innovation on firm performances

Abstract

Purpose – The purpose of this paper is to explore the relationships between the openness of firms and their innovation and financial performances. Design/methodology/approach – In order to investigate such relationships, data on inbound and outbound open innovation (OI) processes and performances of 110 worldwide top research and development (R & D) spending bio-pharmaceutical companies are collected via the consolidated annual reports and the PATSTAT database. The time period of the analysis is 2008-2012. Findings – Regarding innovation performances, R & D productivity and revenues to patents ratio decrease with openness, whilst patents growth is not influenced by OI adoption. As to financial performances, sales growth exhibits a positive trend with openness, while operating profit and turnover decrease with OI adoption. Particularly, an inverted U-relationship with inbound and a U-shape one with outbound are observed as of operating profit. Research limitations/implications – The study adds to the knowledge about the effect of openness on firms’ performances, a topic of increasing interest to academics, managers and policy makers. Both inbound and outbound facets of the phenomenon are taken into account. Practical implications – Understanding how openness affects performances enables more informed decision making by managers, leading to a more effective use of OI activities. Originality/value – The work provides new insights as to what “being open” means for a company, gauging both inbound and outbound transactions after a pecuniary perspective. Employing objective and continuous measures, the relevance of OI for the whole business of firms can be identified.

Successful eco‐innovators: Exploring the association between open inbound knowledge strategies and the performance of eco‐innovative firms

“…Second, regarding the relationship between open innovation strategy and firm performance, our findings are supported by Dries et al (), who concluded that firm openness is related to firm performance measured by turnover, and Caputo et al (), who found that sales growth shows a positive trend with openness. Moreover, similar to Dangelico, Pontrandolfo, and Pujari (), we differentiated between the collaboration in the inbound phase of eco‐innovation with agents inside and outside the supply chain.…”

“…Some empirical studies highlight the importance of openness. Caputo, Lamberti, Cammarano, and Michelino () note that sales growth shows a positive relationship with firm openness. Furthermore, this openness is greater when the search for external knowledge is broader, that is, the higher the number of external sources on which a firm relies (Laursen & Salter, ).…”

A Comprehensive Framework of Corporate Strategies Leveraging Open Innovation

“…One of the differences between open and closed innovation is that in previous theorizing of innovation, external knowledge played useful but complement role [28]. But in open innovation, external knowledge plays a role corresponding to what is achieved from internal knowledge in previous conceptualizing [29].…”

“…It should be noted that the grounded theory research is usually applied in cases where the subject suffers a lack or little attention in previous studies [28] with an open innovation approach for the insurance industry?" It is recommended that a review of the study be conducted by members and peers in order to ensure the research validity and accuracy of findings [28]. In the present study, it is sought the same way for review and validity.…”

The influence of open innovation practices on business performance in Mexican family and non-family SMEs

“…Open innovation has gained popularity in recent years due to several studies in the literature which concur that this construct can be classified as one of the most important performance drivers for many companies (Hauser et al, 2006;Lichtenthaler, 2009;Lee, Park, Yoon, & Park, 2010;Mazzola, Bruccoleri, & Perrone, 2012;Chaston, 2013;Kuang-Peng & Chou, 2013;Caputo, Lamberti, Cammarano, & Michelino, 2016;Casprini, De Massis, Di Minin, Frattini, & Piccaluga, 2017;Park & Kwon, 2018). The concept is wideranging; it can be defined as a new set of forms that serve as a model in innovation administration (Gassmann, 2006), it uses sources of internal and external knowledge that help in the acceleration of innovation (Van de Vrande, De Jong, Vanhaverbeke, & De Rochemont, 2009), and it involves procedures related to external collaboration and cooperation to promote the growth and development of new products or technologies (Freel, 2006).…”