Network structure and open innovation: the role of trust in product development

Abstract

The challenge of implementation of open innovation to new product development does not only spring from the margin of managerial action but also from network structure. However, there is a complex relationship between network structure and product development that allows firms to achieve performance. Along with the survey on SMEs in the Indonesian context, this study demonstrates empirically that firms with extended expansion of network structures will not achieve per performance, unless they can build trust and product development capability upon the networks. The result confirms that combination between social capital theory and dynamic capability enhances the explanation on firm performance.