Linking open innovation, innovation barriers and performance of Indonesian firms

Abstract

Purpose This 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/approach Data 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. Findings The 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/value This 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.