Impact of Inbound Open Innovation on Chinese Advanced Manufacturing Enterprise Performance

Impact of Inbound Open Innovation on Chinese Advanced Manufacturing Enterprise Performance

Depeng Li, Renyong Hou
Copyright: © 2023 |Pages: 16
DOI: 10.4018/IJKM.317224
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Abstract

From the perspective of network embedding, this paper deeply analyzes the relationship between corporate absorptive capacity, environmental turbulence, and corporate innovation performance. Based on network embedding theory, knowledge management theory, and research data on advanced manufacturing enterprises in the middle reaches of the Yangtze River in China, this paper uses structural equation modeling for empirical analysis. (1) Environmental turbulence affects firms' innovation performance. When the external environment is highly turbulent, consumer demand can force companies to embed in external network organizations to obtain more heterogeneous resources, reduce the innovation cycle, and improve corporate innovation performance. (2) Network embedding can improve the enterprises' innovation performance through knowledge and value chains. (3) Enterprises' absorptive capacity plays an important role in improving innovation performance. Research shows that an enterprise with a stronger absorptive capacity is more able to improve its innovation performance.
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1. Introduction

The advanced manufacturing industry involves advanced manufacturing technology and high value-added processes (Zhang, 2018), and it has an important position in national and industrial competition. Although China has become the world’s second-largest economy, the core technologies in its manufacturing sector are not as the advanced levels used internationally. Breaking through the dilemma of technological innovation and improving the innovation performance of China’s advanced manufacturing enterprises have become urgent problems to be solved. In recent years, countries all over the world have focused on the development of the advanced manufacturing industry and the strategic goal of economic development, which has created a new industrial revolution. As a result, developed countries around the world have formulated policies to accelerate the development of the manufacturing industry. As countries focus on “re-industrialization” and other developed countries call for their manufacturing companies to return, China has proposed the “Made in China 2025 Plan” to address the powerful impact on its advanced manufacturing industry. In today’s knowledge economy era characterized by fierce competition, an advanced manufacturing enterprise, that relies only on traditional closed innovation can no longer meet the market demand and, to innovate, requires increasing participation from external resources. Chinese enterprises that rely only on their internal resources to carry out innovation activities will face difficulties in adapting to the rapidly developing market demand. Therefore, scientific and technological enterprises begin to turn to the mode of open innovation and learn the concept of open innovation. By making full use of internal and external knowledge and resources, enterprises can improve their ability of independent innovation. Enterprises need to continuously obtain external heterogeneous resources for enterprise innovation activities to produce better products and obtain higher profits. However, how can enterprises maintain good innovation performance and whether there is an intermediate variable mechanism remain to be verified. Although the theoretical and practical research on open innovation has made positive progress, the existing research still has the following shortcomings: (1) few scholars pay attention to the impact of inbound open innovation on advanced manufacturing enterprises’ innovation performance of advanced manufacturing enterprises; (2) few scholars regard environmental turbulence as an important factor that affects enterprise innovation performance; and (3) most scholars’ research on network embedding remains from the macro perspective; these studies seldom explore the impact of network embedding on enterprise innovation performance from the perspective of knowledge mobility. Therefore, this paper adopts the network embedding perspective to explore the relationship between environmental turbulence, the strength of firm’s absorptive capacity, and a firm’s innovation performance. This paper also studies the effect of knowledge and value chains embedded on firm’s innovation performance clarifies the mechanism of embedded networks, environmental turbulence, absorptive capacity, and innovation performance, and puts forward valuable suggestions. It is hoped that the research of this paper can give a good enlightenment to the enterprises that are carrying our open innovation.

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