Abstract
To successfully implement open innovation, it is essential for firms to build close relationships with external innovators. Although many studies have suggested that relational governance, also known as social control, can effectively manage inter-organizational relationships, the role of relational governance on firms’ open innovation remains equivocal. Using a survey of 318 manufacturing firms from China, this study used a conditional process model to analyze the interplay of relational governance, open innovation, and firms’ innovation performance and examine the influence of environmental dynamism. The results demonstrate that relational governance has a positive impact on firms’ open innovation (both inbound and outbound) and innovation performance. We also found that open innovation mediates the association between relational governance and firms’ innovation performance. A high level of environmental dynamism enhances the indirect effect of relational governance on firms’ innovation performance through open innovation. These findings help clarify the interaction between relational governance and open innovation. They also deepen understanding of the value co-creation principle of open innovation.
Highlights
Intense global competition and frequent technological change have encouraged a growing number of firms to shift their strategies from closed innovation to open innovation [1]
We found that relational governance can promote inbound and outbound open innovation and has a positive impact on firms’ innovation performance
The results of Model 4 demonstrated that when the mediation variables were added to Model 2, inbound and outbound open innovation had a positive impact on innovation performance (b = 0.178, p < 0.001; b = 0.169; p < 0.01, respectively); the regression coefficients of the explanatory variables remained statistically significant but were smaller than those of Model 2 (b = 0.168, p < 0.01; b = 0.183, p < 0.001, respectively), indicating that open innovation partially mediated the association between inter-organizational relational governance and firms’ innovation performance
Summary
Intense global competition and frequent technological change have encouraged a growing number of firms to shift their strategies from closed innovation to open innovation [1]. Recent research has suggested that open innovation may have a dark side; firms engaging with external innovators may suffer from exchange hazards such as knowledge leakage, conflict between the demands of control and openness, and opportunism [8,9,10,11]. These problems pose a substantial challenge to both academic researchers and managers who are dedicated to promoting open innovation practices
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