Two-way open innovation and firm growth: the moderating effect of external environment

A few researchers have studied the relationship of open innovation and firm performance, butthe results are controversial. One of the reasons for this inconsistence may be the ignorance ofthe impact on the external environment. Under the context of open innovation, innovationactivities are divided into inbound open innovation and outbound open innovation. Basedon a sample of 224 Chinese entrepreneurs from the Pearl River Delta and Yangtze RiverDelta, the relationship between the two kinds of open innovation and firm growth isdiscussed, and how this relationship is being affected by environment competitiveness (EC)and environment munificence (EM) is explored. Results show that both the inbound openand outbound open innovations have a positive effect on firm growth. Both EC and EMweaken the relationship between inbound open and firm growth. The study also finds anegative effect of both EC and EM on the relationship between outbound open innovationand firm growth significantly. Limitations and suggestions are proposed for future researchon the implementation of open innovation under different circumstances.