Many or trusted partners for eco-innovation? The influence of breadth and depth of firms' knowledge network in the food sector

Abstract

Although literature on open eco-innovation has recently increased, empirical research on this topic in traditional low-tech sectors is still relatively scarce. The present paper examines how open innovation activities can promote eco-innovations in the food industry, an industry that is sometimes considered a technological laggard with traditionally low cooperation. The paper focuses on the relationship between a firm's interactions with stakeholders, particularly the breadth and the depth of the firm's knowledge network and the firm's propensity to develop different types of eco-innovations. Using a novel and more accurate measure of breadth and depth and addressing endogeneity with instrumental variables, the paper studies their influence on technological eco-innovation in a random sample of 279 food firms in Spain. The results show that coordination difficulties and bounded rationality explain an inverted U shape in the relationship of breadth of external knowledge sources and the propensity to eco-innovate both in product and process eco-innovations. Additionally, our findings confirm that it is important to rely on deep, frequent and intense relationships with stakeholders in order to create the required atmosphere to foster fluent knowledge sharing among partners specially to develop eco-process innovations, but a learning effect appears. Future research should extend the analysis to other countries and sectors to address the limitations of this study.