The effect of inbound open innovation on firm performance: Evidence from high-tech industry

Academics and practitioners have demonstrated that open innovation is critical to superior performance; firms thereby connect their in-house R&D functions with external partners to enhance their innovation activities. This study extends the open innovation theory and the knowledge-based view to explain how a firm's external knowledge resource acquisition influences its innovation deployment as well as its performance. Specifically, we argue that technology scouting plays an important role as an antecedent to collaboration with horizontal and vertical technology acquisitions. Furthermore, the horizontal technology collaboration and vertical technology collaboration play mediators in determining firm performance returns from executing such acquisitions. Based on a large-scale survey of high-tech firms, the study finds that the ability to build well-developed external connection channels increases the efficacy of inbound open innovation in achieving superior performance.