External Search Breadth Research Articles

Improving Innovation Performance by Means of Open Innovation: The Role of Entrepreneurial Orientation and Information Technology Capability

Prior studies indicate that firms yield varying results while adapting to open innovation (OI). They suggest an optimum OI level using the concepts of external search breadth and depth, whose antecedents’ relationships with innovation performance (IP) have been inadequately examined. This study explores how information technology capability (ITC) and entrepreneurial orientation (EO) influence a firm’s external search strategies and impact its IP. A survey of listed German firms ([Formula: see text]) found no support for a curvilinear relationship between open external search strategies and IP. Moreover, the assumption that ITC positively affects the relationship between external search strategy openness and IP was unsupported, proposing a negative moderating impact of ITC. The study observes that EO has differential moderating and direct effects on external search strategy effectiveness and its collective impact on IP.

Unveiling new opportunities: A mixed gamble approach to external search breadth within family firms

This study introduces the idea that external search breadth constitutes a ‘mixed gamble’ where family firms face a unique trade-off between financial and socioemotional wealth (SEW) gains and losses. Considering the peculiarities of family firms, we examine the distinctive influence that two sources of family firm heterogeneity, namely family management and family generational stage, have on the mixed gamble of external search breadth. In addition, we also investigate export propensity as a contingent factor with the potential to alter the manners in which family management and family generational stage affect the external search breadth mixed gamble. Using a longitudinal sample of 1240 Spanish family firms, we empirically find that family firms with greater family management and in first-generation attach more importance to current SEW losses than to potential financial and SEW gains, resulting in lower external search breadth. Furthermore, we find that export propensity alters family managers' mixed gamble of external search breadth, so that current SEW losses become less pronounced in the financial and SEW trade-off, which leads to a higher external search breadth.

The impact of external search, tie strength, and absorptive capacity on new product development performance

This study examines the influences of external search breadth and depth on new product development performance from a knowledge-based view. In particular, we introduce tie strength and absorptive capacity as two contextual variables in this study. The findings from data on 281 Chinese firms indicate that search breadth facilitates new product creativity, whereas search depth facilitates development speed. Tie strength weakens the relationships between search breadth and new product creativity but strengthens the relationship between search depth and development speed. Furthermore, the synergistic effect of tie strength and absorptive capacity negatively moderates the relationship between search breadth and new product creativity but positively moderates the relationship between search depth and development speed.

The tensions between Openness Dimensions in Explaining Innovation Performance

While there is growing importance attributed to open innovation collaborations, the existing framework does not provide clear directions on how firms should distribute their attention to the depth and breadth of their external search strategy. To navigate this tension, we extend the open innovation framework to explore how the value of external search depth on customers for the firm innovation performance may be contingent on two key factors that generate relational and informational benefits: how firms coordinate their activities with clients and the external search breadth of their open innovation strategies. In a sample of Italian firms operating in knowledge-intensive business sectors (N = 358), the study shows that excessive involvement of clients can weaken the benefit of the external search depth yielding an inverted U-shaped relationship with innovation performance, but also that coordination mechanisms and the breadth of the external search strategy can, both separately and jointly, provide informational and relational opportunities that might help to deal with an excessive reliance on customers. This article proposes a novel perspective on open innovation that, exploring the tension between integration with a single source and differentiation with a variety of sources, suggests how firms can leverage multiple types of external collaborations, combining the depth and breadth components of the openness in their external search strategies, and situating them in an integrated relationship with customers.

Pengaruh Inovasi Terbuka Terhadap Kinerja Inovasi Pada UKM di Indonesia

This study aims to examine the effect of open innovation on product innovation and the innovation performance of SMEs in Indonesia. The source of data used in this study is secondary data obtained from Indonesia innovation survey (IIS) 2014 that covers 2011-2013 period. The analytical technique used in this research is descriptive analysis and SEM analysis using the AMOS statistic software. The results show that: (1) open innovation (external search breadth) had a positive effect on product innovation, by contrast open innovation (external search depth) had no significant effect on product innovation; (2) Internal R&D had a positive effect on product innovation, in contrast external R&D had no significant effect on product innovation; (3) collaborative practices has not had a positive effect on product innovation; (4) product innovation has a significant effect on innovation performance.

Barriers to external knowledge search for innovation: empirical evidence from the Korean manufacturing industry

PurposeThis study focuses on resolving empirical inconsistencies in the relationship between external search breadth and innovation performance. Based on research on the knowledge-based view and innovation barriers, three internal barriers that weaken the effectiveness of external search breadth are discerned: information, rigidity and financial barriers.Design/methodology/approachFor empirical analysis, the Korean Innovation Survey 2016 of manufacturing firms was utilized. This study defines innovation performance as the number of patent applications and new product introduction that are analyzed through zero-inflated negative binomial and logistic regressions, respectively.FindingsThe empirical analysis showed three findings. First, external search breadth has a positive relationship with the number of patent applications but not with new product introduction. Second, financial barrier weakens the positive association of external search breadth with the number of patent applications. Third, the interactions of external search breadth with the three internal barriers are negatively related to new product introduction.Originality/valueThis study makes two theoretical contributions. First, by examining barriers to external knowledge search, this research helps identify potential bottlenecks in this search. Second, the study reveals that the effectiveness of external search breadth may have a boundary in firm innovation by showing that this search affects patent application and new product introduction differently.

Exploring the asymmetric complementarity between external knowledge search and management innovation

This paper hypothesizes about and tests the conditions under which firms experience substitutional and complementary effects from the synchronous deployment of innovation search—in the form of external knowledge sourcing, and management innovation—in the form of new organizational processes, practices, and structures, on innovative performance. Theoretically, this represents an interesting puzzle as the extant literature offers two contradictory explanations regarding their synchronous effects, built on fundamentally different problem-solving mechanisms that expose distinct managerial challenges for coordinating external search activities. Specifically, we predict the existence of a substitutional effect between external search depth and management innovation, and a complementary effect between external search breadth and management innovation. We found strong evidence relevant to our theoretical predictions. Our study offers new theoretical insights regarding the synchronicity of innovation search and management innovation.

Contingency fit between open innovation and product market strategy: Evidence from Japanese firms

This research shows the contingency fit between open innovation and product market strategy. Prior research studies these two managerial concepts separately. This study combines these research streams and shows the contingency fit between them. To investigate open innovation in detail, this study analyzes open innovation from two aspects: external search breadth and depth. This study investigates the effects of these concepts on three research and development (R&D) outcomes: innovation performance, new product development (NPD) speed, and firm performance. This study uses questionnaires and archival data from Japanese firms. The results show that cost leadership strategy has a positive effect on firm profitability. Differentiation strategy has a positive effect on all three R&D outcomes. External search breadth barely has a positive effect on any of the R&D outcomes. External search depth has a positive effect on firm performance. When firms implement a cost leadership strategy, external search breadth has a positive and significant effect on both innovation performance and NPD speed. Under the same conditions, external search depth negatively correlates with innovation performance and firm performance. These results show that narrow and deep collaboration enhances R&D outcomes. Last, neither external search breadth nor depth has a significant effect on any of the R&D outcomes when firms implement a differentiation strategy. This study shows that open innovation by firms improves their R&D outcomes especially when firms select a cost leadership strategy. This research complements two prior research streams and indicates the possibilities and limitations of open innovation

Open for innovation: An improved measurement approach using item response theory

Drawing on the theoretical foundations of attitudes and their role in the decision process underlying open innovation (OI) adoption, this study conveys a new perspective of examining firm-level openness as a construct. Based on Item Response Theory, a family of latent trait models rooted in psychology, and using data from the German section of the Community Innovation Survey, we advance a nuanced measure of openness capturing the firm-level attitudes toward external knowledge reception, going beyond current measures focusing on its attributed effects. This approach, based on an implicit attitude measure, allows us to assess the types of OI practices characterizing firms with different value structures (i.e., higher/lower attitudes toward external knowledge), thus offering a more reliable comparison of firms along the openness continuum. A systematic comparison with the widely used measures of external search breadth and depth shows that higher openness is not merely reflected by a higher number (or a more intensive use) of external knowledge sources but by a higher attitude toward complex search patterns, typically implying more challenging OI activities. The proposed construct has strong external validity, as it reflects the key theoretical features of openness and its paradoxes - an inverted U-shaped relationship with innovation performance. The results of this study provide both theoretical and practical implications.

Matching external search strategies with radical and incremental innovation and the role of knowledge integration capability

PurposeThe purpose of this paper is to analyze the differential effects of two external search strategies on radical innovation (RI) and incremental innovation (II) and explore the mediating role of knowledge integration capability (KIC).Design/methodology/approachThe paper is based on the data collected from a sample of 241 firms from Chinese electronic information industry. The author conducted a hierarchical regression analysis using SPSS and PROCESS to test the proposed hypotheses.FindingsThe results showed that both external search breadth and depth have positive effects on RI/II performance. The author also found that the effect of search breadth on RI is greater than that on II, and the effect of search depth on RI is less than that on II. Moreover, the author discovered that KIC fully or partially mediates the relationship between external search strategies and RI/II.Originality/valueThe paper provides a finer grained understanding concerning the difference in the impacts of the two external search strategies on RI/II performance. The paper also adds to the existing literature by explaining the path in which external knowledge search influences RI/II through the mediation effect of KIC.

Linking open innovation, innovation barriers and performance of Indonesian firms

PurposeThis study aims to examine open innovation that consists a wide range of external knowledge search activities, such external search breadth and depth, external R&D, cooperation and acquisition activities, as a response to different innovation barriers faced by Indonesian firms.Design/methodology/approachData are derived from Indonesia innovation survey. Exploratory factor analysis is used to identify and combine innovation barriers variables. Ordered logistic estimation is used to measure the impact of innovation barriers on firm openness decision. Logistic regression is used to measure the impact of innovation barriers on firm openness indicators such as external R&D, cooperation and acquisition as the variables are binary. Finally, Tobit regression is used to measure the impact of firm openness decision on innovation performance.FindingsThe main findings indicate that different barriers to innovation lead to different firms’ openness decisions, and different decisions on openness have differentiated influence on innovation performance.Originality/valueThis study contributes to the innovation barrier literature by empirically testing whether experiencing barriers to innovation is associated with a broader external knowledge search activity. Previous studies tend to link innovation barriers with a narrow activity as indicated by external knowledge searching widely and deeply.

Leveraging Crowdsourcing: The Moderating Role of External Search Breadth

Since the introduction of the open innovation concept, scholars have been studying the importance of boundary-spanning search for innovation performance. In our study we specifically address the effect of crowdsourcing – a unique approach to finding external knowledge – on innovation performance. We moreover investigate the moderating effect of external search breadth on this relationship. Based on a large-scale survey of 4,500 German companies, the results confirm our hypothesis that crowdsourcing is significantly and positively associated with innovation performance. However, as additionally hypothesized, its effect is strongly moderated by the external search breadth of the focal firm. That is, firms with either low or high levels of external search breadth benefit most from crowdsourcing. At the same time, firms with optimal levels of search breadth, do not exhibit additional benefits from crowdsourcing or even a decrease in innovation performance.

Digitization of manufacturing: the role of external search

PurposeManufacturers seek to innovate and improve processes using new digital technologies. However, knowledge about these new technologies often resides outside a firm's boundaries. The authors draw on the concept of absorptive capacity and the literature on open innovation to explore the role of external search in the digitization of manufacturing.Design/methodology/approachThe authors developed and distributed a survey to manufacturing firms in Switzerland, for which 151 complete responses were received from senior managers. The authors used multiple linear regressions to study the relations among the breadth and depth of external search, firms' adoption of digital technologies and operational performance outcomes.FindingsExternal search depth was found to relate positively to higher adoption of computing technologies and shop floor connectivity technologies. No significant correlation was found between external search breadth and firms' adoption of digital technologies. Regarding performance outcomes, there is some evidence that increased adoption of digital technologies relates positively to higher volume flexibility, but not to increased production cost competitiveness.Practical implicationsManufacturing firms that aim to digitize their processes can benefit from inbound open process innovation, but its utility varies for different clusters of digital technologies. Generally, the findings suggest that firms should build strong ties with a few external knowledge partners rather than surface relations with many.Originality/valueThis study contributes to the growing literature on the digitization of manufacturing with an analysis of the relation between firms' external search and their adoption of digital technologies. It adds early empirical insights to the literature on open process innovation.

External knowledge sourcing and innovation in family firms

PurposeThis study aims to investigate the external knowledge search behaviors in terms of search breadth and search depth in family firms and the resultant product innovation in Indian context. The authors theorize the mediating role of absorptive capacity (potential and realized absorptive capacity) between knowledge sourcing from external sources and product innovation. Further, the authors examine the moderating role of crucial internal social capital of the family firm in enhancing the use of external knowledge for firm innovation activities.Design/methodology/approachThe study uses a quantitative research design taking single informant for collection of data from 151 family small and medium enterprises in automotive sector in India. The authors use structural equation modeling to test hypothesized relationships.FindingsThe findings indicate that both search breadth and search depth of family firms are positively associated with product innovation in family firms. The authors also find evidence for partial mediating role of potential and realized absorptive capacity in the relationship between search breadth and innovation and search depth and innovation. The results show how family firms learning taking place while scanning external knowledge sources in terms of external absorptive capacity routines. Finally, the authors find that family firm internal social capital positively moderate the relationship between search breadth and depth, and product innovation.Practical implicationsFamily firms need to innovate to remain relevant in the long-run and as such development of superior capabilities is of great significance to them. Family firm managers must be open to external knowledge as such knowledge help them improve the firm level of innovation through absorptive capacity. Further, family firms must realize and act upon the importance of their social capital for the integration and utilization of acquired knowledge.Originality/valueThis paper is amongst a few papers that take dynamic capability views of innovation in family firms wherein the authors theorize how external search breadth and depth lead to the development of potential and realized absorptive capacity in family firms. The importance of family firm internal social capital as a strong integrating and knowledge sharing mechanism that helps family firms transform external knowledge into innovation is also highlighted.

The double-edged sword of external search in collaboration networks: embeddedness in knowledge networks as moderators

PurposeThe purpose of this paper is to analyze the inverted U-shaped relationship between external search in the collaboration network and firm innovation outcomes. It also seeks to explore whether these curvilinear relationships are moderated by the network centrality and structural holes in the knowledge network.Design/methodology/approachIn this empirical research, the authors collected a sample of patents in the smartphone industry over the period of 2000-2017. Then the authors examined the direct roles of external search breadth and depth in the collaboration network and the moderating role of network embeddedness in the knowledge network by using negative binomial regression.FindingsResults found that external search in the collaboration network contributes more to firm innovation outcomes when the breadth and depth of the external search are moderate rather than high or low. Furthermore, both network centrality and structural holes in the knowledge network have positive effects on the external search breadth – innovation outcomes and external search depth – innovation outcomes relationships.Research limitations/implicationsThe authors collected the patent data within the single industry and excluded other types of industries. This may limit the generalization of the findings.Practical implicationsThe paper has practical implications for adopting appropriate search strategies in the collaboration network and developing a better understanding of the effect of network embeddedness in the knowledge network on firm innovation outcomes. The findings suggest future directions for technology-intensive industries to improve their innovation output.Originality/valueThis study adds value to open innovation literature by pointing out a curvilinear relationship (inverted U-shaped) between external search breadth/depth and innovation outcomes in collaboration networks, in contrast to studies focused on firms’ external collaboration strategies in a certain industry context. Furthermore, this study reinforces the key contingent role of embeddedness in knowledge networks. This study provides a valuable theoretical framework of innovation outcome determinants by connecting the network perspective of open innovation theory with an embeddedness view.

The Impact of the Openness of Firms’ External Search Strategies on Exploratory Innovation and Exploitative Innovation

Innovation activities of private firms are crucial for sustainable economic growth in every society. Therefore, the majority of firms around the world spend large amounts of capital (money, time, and human resources) in searching for novel innovative opportunities in the marketplace. In our study, we sought to understand how the openness of firms’ external search strategies (external search breadth and external search depth) affects firms’ innovation capabilities as measured by awareness, decision-making, interpretation, and implementation capability. Furthermore, using survey data collected from 112 Chinese manufacturing firms over a six-month period, this study conducted an empirical analysis about the association between firms’ innovation capabilities on the type of innovation (exploratory innovation vs. exploitative innovation). This study also provides important managerial insights for manufacturing companies.

European MNE subsidiaries' embeddedness and innovation performance: Moderating role of external search depth and breadth

While much research has been conducted on the link between embeddedness and innovation outcomes, less attention has been paid on how and when MNE subsidiaries can effectively leverage their internal embeddedness to achieve greater innovation performance. We hypothesize knowledge transfer as a mediating mechanism to channel the potential role of MNE subsidiaries' internal embeddedness in innovation performance. Moreover, we explore the moderating influences of external search depth and breadth on subsidiaries' internal knowledge transfer and innovation performance. To test our framework, we rely on primary data collected from 91 subsidiaries of eleven European MNEs. The results show the degree of knowledge transfer from other MNE units mediates the link between subsidiaries' internal embeddedness and their innovation performance. We also find that external search depth positively moderates the link between the degree of knowledge transfer and subsidiary's innovation performance, while external search breadth does not. We illustrate that knowledge transfer mechanisms and the moderating role of external search approaches can be instrumental in channeling and effectively realizing the role of subsidiary internal embeddedness in innovation performance.

Abandoning innovation activities and performance: The moderating role of openness

Firms are encouraged to continually initiate innovation activities as part of their new product development processes and to be open to the use of external knowledge sources. Yet, many are abandoned. Openness to external knowledge sources and the experience of abandoning innovation activities are, therefore, becoming a part of an organization’s reality and innovation strategy. In this paper, we aim to explore how the experience of having abandoned an innovation activity can affect innovation performance and the role two key dimensions of openness, external search breadth and formal innovation collaboration breadth, play. Using data from the UK Innovation Survey, we find that the experience of having abandoned an innovation activity leads to improved innovation performance and that this is negatively moderated by the two dimensions of openness. When external search breadth is high, i.e. when an organization engages with a higher number of different types of knowledge sources, the link between abandoning innovation activities and innovation performance weakens. Similarly, when formal innovation collaboration breadth is high, i.e. the breadth of a firm’s formal collaboration relationships is high, the link between abandoning innovation activities and innovation performance also weakens. We conclude by discussing the theoretical and practical implications of our findings.

SEARCHING WIDELY OR DEEPLY? THE IMPACT OF OPEN INNOVATION ON INNOVATION AND INNOVATION PERFORMANCE AMONG INDONESIAN MANUFACTURING FIRMS

Since the term Open Innovation (OI) was coined by Henry Chesbrough in 2003, OI studies have been frequently conducted. Surprisingly, OI insights, in the context of Indonesian firms, are scarce. Furthermore, there are no existing OI studies that use data derived from innovation surveys. Hence, this study attempts to close the gap in the literature, by providing insights into Indonesian firms’ openness toward external knowledge, and its impact on innovation performance. The main aim of this study is to investigate the impact of OI practices on Indonesian manufacturing firms’ propensity to innovate (i.e. their product, process, organization, and marketing) and innovation performance. Product and process innovations are grouped under the term technological innovation, while organization and marketing innovations are classified as non-technological innovation. Data used in this study were derived from the Indonesia Innovation Survey (IIS) 2011 that covered the period from 2009-2010. Following Laursen and Salter’s (2006) study, OI indicators consist of external search breadth (i.e. the number of external sources or search channels that firms rely upon in their innovative activities) and depth (the extent to which firms draw deeply from the different external sources or search channels) in innovation process. Undertaking logistic and tobit regressions, this study shows that in general, both breadth and depth significantly and positively affect technological and non-technological innovation, as well as innovation performance. However, the over-search on external knowledge, measured by breadth squared and depth squared, negatively and significantly influence innovation and innovation performance. This indicates that too much external knowledge, sourced during the innovation process will diminish the return of innovation. This study also finds an indication of a complementary relationship existing between internal R&D and external knowledge; meaning that the implementation of one knowledge-sourcing strategy (either sourcing from internal R&D or external knowledge) increases the marginal returns from another. Lastly, important implications related to theoretical and innovation strategies are proposed.

External knowledge search, absorptive capacity and radical innovation in high-technology firms

Open innovation and absorptive capacity are two concepts based on the idea that companies can leverage the knowledge generated externally to improve their innovation performance. The aim of this paper is to analyse the joint effect of open innovation and absorptive capacity on a firm's radical innovation. Open innovation is expressed in terms of external search breadth and depth strategies and absorptive capacity is described by distinguishing between potential and realized absorptive capacity. In order to test our hypotheses, we carried out empirical research in firms operating in high-technology industries. The results indicate that internal routines and processes for absorbing external knowledge help explain radical innovation as they show a significant effect of potential and realized absorptive capacity. Also, there is a moderating effect of absorptive capacity on open innovation. Specifically, potential absorptive capacity exerts a positive effect on the relationship between external search breadth and depth and radical innovation. Realized absorptive capacity moderates the influence of external search breadth. These findings confirm the complementary nature of absorptive capacity and open innovation search strategies on radical innovation.