How Open Innovation Mediates Absorptive Capacity: Evidence from Japanese Firms

Abstract

Except for a few studies, prior research has not investigated the contingency fit between open innovation and absorptive capacity. To study the effects of these concepts in detail, this work classifies open innovation into academic and business collaboration, while also classifying absorptive capacity into potential and realized absorptive capacity. Then, we show our hypotheses for the above four concepts. This study uses questionnaires and archival data from Japanese firms and shows that potential absorptive capacity is positively correlated with innovation performance when a firm conducts academic collaboration but that realized absorptive capacity is negatively correlated with innovation performance under the same conditions. In contrast, potential absorptive capacity is negatively correlated with innovation performance when a firm conducts business collaboration, especially with suppliers, but realized absorptive capacity is positively correlated with innovation performance under the same conditions. This study shows that the consideration of a combination of patterns among these concepts may be important for enhancing innovation performance and highlights the possibilities and limitations of these concepts.