Investigating open innovation strategies and firm performance: the moderating role of technological capability and market information management capability

Purpose This study aims to assess how firm functional capability moderates the relationship between two types of open innovation and performance, with a special focus on the role of technological capability and the join effect market information management capability. This paper develops and tests a research model, which assesses how the performance implications of two open innovation forms are shaped by the technological capability and how such an effect is contingent on market information management capability. Design/methodology/approach Survey data were collected from 238 Chinese high-tech enterprises. Structural equation modeling and linear regression were used to test the data. Then, the main research questions were answered. Findings Empirically results show that technological capability strengthens the influence of inbound open innovation on firm performance. However, the moderate effect of technological capability on the relationship between outbound open innovation and firm performance remains unsupported. A higher technological capability with a high level of market information management capability increases the efficacy of outbound open innovation in gaining superior performance. Additional analysis shows that when firms implement inbound activities and possess a strong technological capability, they will achieve higher performance if they possess a moderate level of market information management capability, compared with a high or low level. Originality/value This paper provides new evidence on the benefits of different open innovation strategies on firm’s performance and, more importantly, the specific firm-level contingencies (technological capability and market information management capability) under which these benefits are more likely to be enhanced. It clarifies what the capabilities are and how they interact to foster the robust open innovation strategies, which sheds new light on the boundary conditions that affect the open innovations–firm performance relationship.