Abstract
Firms continuously search for external knowledge that can contribute to product innovation, which may ultimately increase market performance. The relationship between external knowledge sourcing and market performance is not well-documented. The extant literature primarily examines the causal relationship between external knowledge sources and product innovation performance or to identify factors which moderates the relationship between external knowledge sourcing and product innovation. Non-technological innovations, such as organization and marketing innovations, intervene in the process of external knowledge sourcing to product innovation to market performance but has not been extensively examined. This study addresses two research questions: does external knowledge sourcing lead to market performance and how does external knowledge sourcing interact with a firm’s different innovation activities to enhance market performance. This study proposes a comprehensive model to capture the causal mechanism from external knowledge sourcing to market performance. The research model was tested using survey data from manufacturing firms in South Korea and the results demonstrate a strong statistical relationship in the path of external knowledge sourcing (EKS) to product innovation performance (PIP) to market performance (MP). Organizational innovation is an antecedent to EKS while marketing innovation is a consequence of EKS, which significantly influences PIP and MP. The results imply that any potential EKS effort should also consider organizational innovations which may ultimately enhance market performance. Theoretical and practical implications are discussed as well as concluding remarks.
Highlights
Open innovation, which is a method of collaboration that incorporates external knowledge sources, has received significant attention from both academia and industry [1]
Research has not extensively evaluated the role that such a variety of innovative activities has in the relationship between external knowledge sourcing and market performance. This study addresses this need by positing and empirically testing a theoretical model which links external knowledge sourcing to a variety of innovative firm activities
The composite reliability (CR) for each scale was calculated to analyze the internal consistency of the latent variables
Summary
Open innovation, which is a method of collaboration that incorporates external knowledge sources, has received significant attention from both academia and industry [1]. External Knowledge Sourcing and Market Performance knowledge, which may generate innovative products in response to market changes [2,3]. Open innovation has become commonplace in many industries, including manufacturing and service industries, and has expanded as technology that facilities inter-organizational collaboration matures and competition increases. Leading information technology (IT) companies such as Apple, Samsung, and IBM have established open business ecosystems to work with external partners, developers, consumers, and potential competitors. Apple was able to increase its corporate value and competitiveness by seamlessly integrating thousands of external developers to their App Store, an online platform for mobile applications. Apple would have been challenged to replicate the same market performance had it relied solely on their own resources to develop the hundreds of thousands of applications available in their App Store [4]
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