How does external knowledge source influence product innovation in Korean firms?

Abstract

This study addresses how external knowledge sources affect product innovation by examining innovating Korean manufacturers surveyed by STEPI in 2012. The external knowledge source of the company is classified in STI mode (science-technology-innovation) on the basis of scientific knowledge and DUI mode (doing-using-interacting) on the basis of experience knowledge. First, the study reveals that neither the STI nor DUI modes affects the firm’s financial performance via product innovation. Second, the results show that the more the company learns from external knowledge through the STI or DUI modes, the more frequent its product innovation. Therefore, STI and DUI usage is found to be proportional to the frequency of product innovation, with the STI mode exerting much more influence on product innovation frequency. Finally, the study finds that neither the STI nor DUI modes affect exploratory innovation but that the DUI mode is proportional to it. Thus, the frequency of product innovation is enhanced through the STI mode via the application of externally sourced scientific knowledge to the innovation process, while current technology and products are enhanced through the DUI mode. This study finds that enhancing product innovation requires that companies determine the proper external knowledge source in accordance with their innovation performance goals.