Abstract
Open Innovation (OI) is among the vital innovation paradigms for assisting small and medium enterprises (SMEs) to effectively implement innovation initiatives. Drawing on the concepts of organisational agility and absorptive capacity with transaction cost theory, this study’s goal is to investigate factors affecting the adoption of an Open Innovation (OI) orientation in Thai SMEs. Using data from 214 SMEs in Thailand, structural equation modelling validated the model and analysed the proposed hypotheses. The results show that organisational agility, economic and financial readiness and absorptive capacity relate positively to OI adoption and innovation performance. Organisational agility (b = 0.553) had the greatest influence on OI adoption, then economic and financial readiness (b = 0.405) and absorptive capacity (b = 0.387) followed. The results of mediation analysis also reveal that OI adoption partially mediates the effects of organisational agility and absorptive capacity on innovation performance. Our study provides a trailblazing empirical analysis of the major factors influencing SMEs’ OI adoption and performance, extending knowledge of OI adoption by SMEs in emerging economies. The paper proposes a holistic framework for examining SMEs’ OI adoption and performance, through the integration of organisational agility, absorptive capacity and transaction-cost concepts. Doi: 10.28991/esj-2021-01295 Full Text: PDF
Highlights
Innovation is one of the imperative strategic mechanisms for sustainable growth
Open Innovation Adoption was measured by four items adapted and modified from [46, 48], and Innovation Performance was measured by four items modified from Hameed et al (2018) and Hoonsopon and Ruenrom (2012) [48, 49]
A holistic conceptual framework based on concepts of organisational agility, absorptive capacity and transaction cost theory was proposed for an investigation of factors influencing SMEs’ Open Innovation (OI) adoption
Summary
Innovation is one of the imperative strategic mechanisms for sustainable growth. Firms must innovate in response to changing customer needs, market structure and technology disruption. Data from the World Bank [5] reveal that SMEs represent about 90% of businesses and over 50% of employment worldwide, contributing 40% of national income (GDP) Both SMEs and innovation are important mechanisms for national economic development. Age and research and development (R&D) investment; external factors include technological advances and industry intensity Both affect large multinational firms’ innovation adoption [10, 15]. The lack of a holistic conceptual framework to determine factors influencing an OI adoption allows us to contribute a fruitful body of knowledge, by drawing on organisational-agility and absorptive-capacity concepts and transaction-cost theory, to better understand OI adoption and innovation performance in the SME context.
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