The adoption of inbound open innovation practices in developing countries: empirical evidence from the manufacturing sector

Abstract

Literature suggests that open innovation approach of large firms shows different characteristics with small- and medium-sized enterprises (SMEs), so this paper tends to shed light on these structural differences. With the aim to gain a deeper understanding of the adoption of inbound innovation practices among firms in one small transition economy, this study is focused on the question of how different dimensions of inbound innovation practices affect the innovative performances of SMEs and large firms and how, eventually, these practices should be framed and managed differently. This paper develops a research model which analyses inbound innovation practices on a data set of 227 SMEs and large firms operating in Bosnia and Herzegovina. The data were collected by using a questionnaire specifically designed for this research. Association between the level of innovation of products in firms and inbound practices, between exploit and explore strategies, between types of industry and different types of collaborations with partners outside the firm is assessed by canonical correlation. The research results revealed that inbound innovation practices of manufacturing firms in different stages of innovation development process starting from idea generation, experimentation, up to the commercialization, have positive influence on their innovative performances. This study contributes to the existing research on open innovation by providing empirical evidences for different dimensions of inbound innovation practices in SMEs and large firms. We offer a very important insight into open innovation practices and challenges beyond well-researched developed countries.