Find your match! How emerging economy firms combine different forms of openness to innovate

Abstract

This study investigates how combining different forms of formal collaboration (i.e., developed vs. emerging economy collaborations) and informal search (i.e., search breadth vs. depth) affects the innovation performance of emerging economy firms. The open innovation literature has primarily focused on the effect of individual open innovation practices, generating conflicting results. We argue that outcomes depend on specific combinations of open innovation practices. Drawing on the notion of external absorptive capacity routines, we argue that combining forms of openness that rely on the same absorptive capacity routine positively affects innovation performance. We specifically ask whether broad or deep search, which rely on different routines, is more appropriate for emerging economy firms who are collaborating with developed or other emerging economy partners. We test our hypotheses using responses from 659 manufacturing and service firms to two waves of the Turkish Innovation Survey. Using Tobit regression analysis, we generate findings consistent with our expectations. We find that deep search is appropriate when collaborating with developed economy partners, whereas broad search is appropriate when collaborating with other emerging economy partners. These confirm the importance of combining forms of openness with matching routines. Overall, we illustrate the importance of finding the right combination of different forms of openness.