Open innovation is the new currency–Investigating how firms can maximize the effectiveness of open innovation initiatives

Abstract

Open innovation has gained increasing prevalence not only because of its role in enhancing business performance and new product development success, but also of its potential to tackle complex societal issues. However, equivocal empirical and practical evidence indicates that investment in open innovation may not always pay off. Therefore, this thesis aims to explore how firms can maximize the effectiveness of their open innovation initiatives. To address this overarching research question, this thesis is structured into three interconnected studies in the open innovation field. Specifically, Study 1 provides a comprehensive review of open innovation by means of a content analysis of 354 empirical articles from 2003 to 2024. The systematic literature review explores the existing literature on why (antecedents) firms adopt open innovation, and how (mediators) and under what conditions (moderators) open innovation practices are beneficial to performance (outcomes). This review uncovers six major theories that have been applied in open innovation research: absorptive capacity, the resource-based view, stakeholder theory, the knowledge-based view, network theory, and social/intellectual/human capital perspectives. It also reveals that existing studies have largely focused on exploring the antecedents of open innovation, and that more effort is needed to understand how and under what conditions open innovation contributes to business and sustainability performance. Building on instrumental stakeholder theory, Study 2 explores whether and under what conditions a firm's external knowledge sourcing, one type of open innovation, influences its environmental innovation performance. Based on survey data collected from 233 Irish-based companies, the partial least square structural equation modelling (PLS-SEM) analysis results show that deeper external knowledge sourcing leads to higher environmental innovation performance. In addition, cohesiveness and technological turbulence positively moderate the effect of external knowledge sourcing on environmental innovation performance, while entrepreneurial orientation negatively moderates such an effect. Drawing on social network analysis and persuasion theories, Study 3 explores how online reviews and users' social network centrality interact to influence idea popularity in open innovation communities. Based on open-source data from the LEGO Innovation Community, the ordinary least square (OLS) regression analysis results show that review volume, review valence, review variance, and review length all positively influence idea popularity. In addition, users' in-degree centrality positively interacts with review valence, review variance, and review length to influence idea popularity, while their out-degree centrality negatively interacts with such effects. Findings from this thesis generate several theoretical contributions for researchers and practical implications for industry practitioners.