Mechanisms underlying product innovation in creative industries: Interplay of founders’ knowledge stocks and university-industry linkages

This study examines the mechanisms through which founders’ knowledge stocks, creative expertise, and prior professional experience moderate the relationship between industry-university (I-U) links and innovation novelty of small creative industry (CI) firms. We argue that, while external knowledge sourcing is vital for small firms in creative industries effectiveness depends on the founders’ knowledge stocks. Using a data set of 1,034 CI firms across five European countries—Denmark, Sweden, the UK, Italy, and Greece—we estimate ordered probit models to analyze the nature and directionality of such interactions. Empirical findings reveal that the positive impact of I-U links on new-to-the-market innovations is strengthened when founders exhibit higher creative expertise, while the effect of I-U links on new-to-the-firm innovation is weakened as founders’ prior experience increases. In terms of direct effects, both I-U linkages and founders’ past experience positively influence new-to-the-market innovations; whereas, new-to-the-firm innovations are not significantly affected by either factor.