Enhancing radical innovation: the interplays of open innovation activities, firm capabilities, and environmental dynamism

ABSTRACT

This study investigates two types of firm capabilities (network and innovation) that could enhance the effects of open innovation activities (inbound and outbound) on radical innovation with the consideration of environmental dynamism. Based on a cross-industry survey of 201 Asian firms, we find that the effectiveness of firm capabilities and open innovation activities is contingent on the level of environmental dynamism. Specifically, when the level of environmental dynamism increases, inbound activities, network capabilities, and innovation capabilities are able to enhance radical innovation. In addition, the level of environmental dynamism moderates the effect of network capabilities on both inbound and outbound activities in creating radical innovation, but not so with the effect of innovation capabilities. Overall, this study contributes to the open innovation literature by shedding light on important complementarities between inbound/outbound activities and specific types of firm-enabled capabilities (network and innovation) under conditions of environmental dynamism.

KEYWORDS:

• Open innovation activities
• firm capabilities
• environmental dynamism

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes on contributors

Colin C.J. Cheng, Ph.D., is affiliated with National Taipei University in Taiwan. His research focus is in innovation. He has published widely in well-regarded journals, such as Journal of Product Innovation Management, Journal of Cleaner Production, Technovation, and Journal of Business Research.

Chwen Sheu, Ph.D., is the Paul Edgerley chair in business administration and professor of management at Kansas State University, United States. Sheu received his doctorate in operations management from Ohio State University. He studies supply chain management from the aspects of globalization and business intelligence. His primary research goal is to examine and understand the influence of national differences and the use of data analytics in supply chain practices.