How does open innovation affect firms’ innovative performance

Purpose: This paper aims to explore the direct effects of open innovation (OI) on firms’ innovative performance, and to examine the moderating effects of knowledge attributes, including knowledge distance, knowledge embeddedness and partner opportunism on this relationship. Design/methodology/approach: Survey data of 247 samples from China were used to test the proposed model through hierarchical regression analysis. Findings: The findings indicate that the dimensions of OI are positively related to innovative performance. The results also reveal that knowledge distance positively moderates the relationship between inbound OI and innovative performance, whereas knowledge embeddedness negatively affects that relationship. Knowledge embeddedness negatively affects the relationship between inbound OI and innovative performance, whereas knowledge distance positively moderates that relationship. Thus, a new finding is proposed that knowledge attributes could align effectively with specific OI type to achieve superior innovation outcomes. In addition, the empirical results suggest that partner opportunism plays a negative moderating role on the relationship between outbound OI and innovative performance. Originality/value: The proposed view that a firm’s innovation outputs will be superior when its knowledge attributes effectively align with OI enriches studies of the OI context and expands the literature of both the resource-based view and the knowledge-based view. Furthermore, this study provides insights into how OI benefits can be influenced by external contexts from the perspective of partners’ opportunistic behaviour.