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ABSTRACT
Over the past decade, open innovation has seemingly become the dominant approach for revitalising a company’s innovation process. Can open innovation improve firm performance? This study optimises the measures for open innovation based on existing literature and by considering the actual situation in China. We draw conclusions from an analysis of 516 annual reports and data from Wind of 172 biopharmaceutical companies from 2013 to 2015. Result indicates that open innovation strategies have different effects at different times: (1) Inbound open innovation has a negative impact on short-term (1–2 years) firm performance, but an inverted U-shaped curvilinear relationship will develop after about 3 years. (2) Outbound open innovation has a negative impact on short-term firm performance, but leaves a positive effect in the long run. Therefore, enterprises should maintain a moderate inbound open innovation level and improve the degree of outbound open innovation to improve long-term performance.
Disclosure statement
No potential conflict of interest was reported by the authors.
Notes on contributors
Lihua Fu is a PhD Candidate of School of Management of University of Science and Technology of China. Her primary research interests are innovation management and technological economics.
Zhiying Liu is a Professor of School of Management of University of Science and Technology of China. His research interests focus on innovation management and industrial economics.
Zhangqing Zhou is a PhD Candidate of School of Management of University of Science and Technology of China. His primary research interests are innovation management and mathematical modelling.