Abstract
This study aims to explore whether a firm’s financial sustainability is enhanced by open innovation especially after a global financial crisis. There are few studies on the relationship between open innovation and financial sustainability. This study aimed to fill the literature gap by analyzing the change in the financial ratio according to the increase or decrease in open innovation. We used a case study method regarding large Korean food firms. Korea is a latecomer in the food industry, which is driven by large companies. This study is meaningful for financial sustainability studies of countries with a lack of resources and small market size, which require open innovation. The findings of this study are as follows: The most preferred alliance strategy of large food firms is joint research. In order to secure raw materials and markets, open innovation was actively conducted abroad, which increased growth and profitability. However, a firm which rarely adopts open innovation could grow steadily through internal strategies. On the other hand, although relatively many open innovations have been used, growth and profitability could decrease. Firms with sufficient absorptive capacity strengthen financial sustainability through open innovation.
Highlights
The food industry is one of the most important sectors of the global economy, which is required to provide a wide range of products at a short delivery date and low cost [1]
One of the major issues in management is managing the risks in this sector, which is heavily influenced by exchange rates and oil prices
The results show that Nongshim seemed stakeholders did not increase because profitability decreased
Summary
The food industry is one of the most important sectors of the global economy, which is required to provide a wide range of products at a short delivery date and low cost [1]. The food industry faces a series of challenges: Changes in lifestyles [2], changes in global food consumption patterns [3], and social response to food systems due to environmental, social, and economic issues [4]. These led to a period of structural change [5]. Because most firms import raw materials, machinery, packaging, and other materials needed for food production from abroad, the margin of change in profitability due to the fluctuation of the exchange rate is much greater. Food firms have suffered a double burden of rising raw material costs and falling sales
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