Open innovation and firm performance: The mediating role of social capital

Abstract

This article examines the role of social relations and networks in open innovation settings. Building on extant open innovation literature as well as on social capital theory, we develop a model that conceptualizes social capital as a mediator between the implementation of open innovation instruments and firm performance. In doing so, this paper adds to the understanding of the role of structure and content of social relations in open innovation contexts as well as of sustainable side-effects of open innovation. In particular, we argue that apart from a direct effect of open innovation instruments on firm performance, there is also a mediated relationship between these variables. More precisely, we propose that the implementation of open innovation instruments strengthens an organization's social capital, which is, in turn, positively related to firm performance. s© 2013 John Wiley & Sons Ltd.