The Effects of Top Management Team External Social Capital on Firm's Openness: Exploring the Mediating Role of Strategic Knowledge Integration

Abstract

Going from the knowledge-based view of the firm, we designed a framework to describe top management team's (TMT) external social capital as a determinant of the depth and breadth of external knowledge search strategies in open innovation and Small and medium-sized enterprises (SMEs) innovation performance. Besides, we examined the significance of strategic knowledge integration in external knowledge search strategies and innovation performance. Using a sample of 252 Kenyan manufacturing SMEs, the authors applied partial least square to a structural equation model to test the suggested hypotheses. The findings reveal that firms with intense, more frequent, and closer TMT external social capital with external knowledge sources can enhance the stock of externally acquired knowledge, showing that TMT's external social capital plays a crucial role in facilitating the breadth and depth of external knowledge search strategies. The article also finds that external knowledge search breadth is more affected by TMT's external social capital, whereas strategic knowledge integration mediates external knowledge search practices and innovation performance. Therefore, firms with a good ability to identify new opportunities and dynamic strategic businesses tend to be more innovative. This article contributes to social capital and open innovation literature by analyzing two critical determinants: external social capital and strategic knowledge integration. This article attempts to address these gaps in the literature by linking TMT's external social capital, the search for external knowledge, and strategic knowledge integration to innovation performance.