Open innovation and superior performance in SMEs: The mediating role of marketing capabilities and innovation

Even though many enterprises apply open innovation practices in the search for external sources of knowledge, this does not necessarily translate to improved performance. This issue is especially important for medium and small enterprises (SMEs) which need to expand their knowledge frontiers to survive and achieve superior performance. The objective of this research is to analyze the role of marketing capabilities and innovation in the relationship between open innovation and organizational performance. Using structural equation modeling, this research presents empirical evidence from 154 manufacturing SMEs. Research findings reveal that open innovation alone does not influence organizational performance, confirming that marketing capabilities and innovation play individual and sequential mediation roles in the relationship between open innovation and performance. From this, SME managers, in addition to looking for external knowledge, should develop marketing and innovation capabilities to capitalize this external knowledge and develop effective strategies to significantly impact performance.