The Role of Industry and Economic Context in Open Innovation

Abstract

Using innovation survey data on a sample of UK manufacturing firms, Laursen and Salter (Open for innovation: The role of openness in explaining innovation performance among UK manufacturing firms. Strategic Management Journal, 27:131–150, 2006) documented a non-monotonous relationship between external search strategies and firm-level innovative performance. We find partially similar results in a combined sample of Nigerian manufacturing and service firms. A major discrepancy is that external search appears not to matter for radical innovation in our sample. Based on multiple research streams including economics of innova- tion and development economics, we develop and test new hypotheses on sectoral differences and the role of the economic context. We find that in a developing context, a wider range of innovation obstacles implies broader external search and more intense obstacles require deeper search. We explore the implications of these results for management research and theory.