Abstract
This paper examines the relationship between open innovation (OI) practices (inbound and coupled) and innovation performance in service firms. Specifically, it invokes a dynamic capabilities perspective to propose the differential moderating effects of two forms of reconfiguration capabilities, strategic reconfiguration capability (SRC) and operational reconfiguration capability (ORC), on the focal relationship. Based on a sample of service sector firms drawn from the UK Community Innovation Survey, our analysis shows the positive combinative effects of SRC and coupled OI on radical innovation outcomes and those of ORC and coupled OI on incremental innovation outcomes. The findings of differential moderating effects underscore the need to assess the boundary conditions within which OI positively impacts on innovation outcomes and offer insights to managers on the importance of strategic and operational reconfiguration capabilities for achieving better innovation outcomes from OI practices.
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