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An analysis of the open innovation effect on firm performance

DOI:10.1016/j.emj.2016.02.008
Authors:
Marco Greco at Università degli studi di Cassino e del Lazio Meridionale
Marco Greco
Michele Grimaldi at University of Cassino and Southern Lazio, Cassino, Italy
Michele Grimaldi
  • University of Cassino and Southern Lazio, Cassino, Italy
Livio Cricelli at University of Naples Federico II
Livio Cricelli
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Abstract

The open innovation (OI) paradigm describes how firms innovate by interacting with other organizations. Several authors found that specific OI strategies have a positive effect on economic and industrial innovation performance. Nevertheless, over-search and over-collaboration phenomena might reduce the OI marginal returns when a firm resorts to additional external innovation partners. This article hypothesizes that the variety of external innovation channels (search breadth) used by a firm, the extent to which a firm draws deeply from them (search depth) and the extent to which a firm collaborates through different external channels (coupled OI) are curvilinearly related with innovation performance. The empirical models are estimated using 84,919 firms from Eurostat's Community Innovation Survey, which was conducted in 2008 across European countries. The results suggest that search breadth is curvilinearly related with all the measures of innovation performance, whereas s
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Greco, M., Grimaldi, M., & Cricelli, L. (2016) An analysis of the open innovation effect on firm
performance, European Management Journal, doi:10.1016/j.emj.2016.02.008
An analysis of the open innovation effect on firm performance
Marco Grecoa*, Michele Grimaldib, Livio Cricellic
Abstract The open innovation paradigm describes how firms innovate by interacting with other
organizations. Several authors found that specific open innovation strategies have a positive effect on
economic and industrial innovation performance. Nevertheless, over-search and over-collaboration
phenomena might reduce the open innovation marginal returns when a firm resorts to additional
external innovation partners. This article hypothesizes that the variety of external innovation channels
(search breadth) used by a firm, the extent to which a firm draws deeply from them (search depth) and
the extent to which a firm collaborates through different external channels (coupled OI) are
curvilinearly related with innovation performance. The empirical models are estimated using 84’919
firms from Eurostat’s Community Innovation Survey conducted in 2008 across European countries.
The results suggest that search breadth is curvilinearly related with all the measures of innovation
performance, whereas search depth is not subject to diminishing marginal returns in most cases.
Furthermore, this article shows that coupled OI is curvilinearly related with the development and
commercialization of radically new products. The findings of this study make several contributions
both in a practical perspective, showing how manager can put into practice different OI strategies to
influence innovation performance, and in a theoretical perspective, suggesting a number of
recommendations for future research.
Keywords: open innovation, innovation performance, coupled open innovation, inbound open
innovation, search depth, search breadth.
The article can be downloaded for free by visiting the following link by
November, 18.
http://authors.elsevier.com/a/1ToVfxscskirp
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