Technology Orientation and Inbound Open Innovation at LMT Firms: An Empirical Study in Sri Lanka

Abstract

Despite the growing interest in open innovation, previous studies have ignored the role of firms’ strategic capability in evoking open innovation, especially in low and medium-low technology (LMT) firms from technologically less advanced countries. This study rectifies this problem by examining the impact of technology orientation on the implementation of inbound open innovation. Also, assessing the effect of the environment on the relationship between technology orientation and inbound open innovation, this study considers technology turbulence and market potential. The hierarchical regression analysis, based on cross-sectional survey data collected from 272 LMT firms in Sri Lanka reveals that LMT firms adopt inbound open innovation at a moderate level. LMT firms value technology and face above-average level technology turbulence and market potential. Results show that both technology orientation and market potential have a significant positive effect on the implementation of inbound open innovation, but no evidence from technology turbulence. Also, technology turbulence negatively, and market potential positively moderate the relationship between technology orientation and inbound open innovation. The findings indicate that LMT firms in Sri Lanka should exploit technologically superior products to meet customers’ needs and attract the market. Also, technology orientation plays a salient role in attractive markets but not in technologically turbulent environments.