The open innovation paradigm in developing economies: Evidence from Chinese firms

Despite a growing trend towards the axiomatic acceptance of ‘open innovation’s’ benefits, the generalizability of this new operational paradigm to developing economies has yet to be fully explored. This study provides empirical evidence and analysis regarding the relationship between open innovation) based strategies and innovation performance among Chinese firms. Our findings indicate that Chinese firms face certain barriers to the adoption of open innovation strategies relating to inadequate internal research expertise and limited absorptive capacity. These weaknesses make it difficult for them to benefit from the key external sources of openness (e.g. inter)firm networks, university linkages and research institute relations). While the positive role of absorptive capacity in facilitating open innovation outcomes has been supported in this study, we find this role is limited to large firms generally. These findings imply that developing economies like China will garner the benefits available from open innovation when they develop the capabilities required to identify, assimilate and commercialise knowledge and technologies from external sources