Managing open innovation projects with science-based and market-based partners

•We examine the relationship between open innovation partnerships and the financial performance of R&D projects.•Project management formality moderates the relationship between open innovation partnerships and project performance.•R&D projects with science-based partners are associated with...

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Bibliographic Details
Published in:Research policy 2014-06, Vol.43 (5), p.828-840
Main Authors: Du, Jingshu, Leten, Bart, Vanhaverbeke, Wim
Format: Article
Language:English
Subjects:
Business management
Eastern Europe
Financial performance
Innovation
Innovations
Management theory
Multinational corporations
Multinational enterprises
Open innovation
Organizational behaviour
Partnering
Project management
R&D
R&D collaboration
R&D project
Research & development
Research and development
Studies
Western Europe
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Summary:•We examine the relationship between open innovation partnerships and the financial performance of R&D projects.•Project management formality moderates the relationship between open innovation partnerships and project performance.•R&D projects with science-based partners are associated with better financial performance when they are managed loosely.•R&D projects with market-based partners are associated with better financial performance when they are managed formally. This paper examines the relationship between (outside-in) open innovation and the financial performance of R&D projects, drawing on a unique dataset that contains information on the open innovation practices, management and performance of 489 R&D projects of a large European multinational firm. We introduce two types of open innovation partnerships – science-based and market-based partnerships – and examine their relationships with project financial performance. In addition, we investigate whether the open innovation—project performance relationships are influenced by the way how R&D projects are managed. Our results show that R&D projects with open innovation partnerships are associated with a better financial performance providing that they are managed in the most suitable way. Market-based partnerships are positively correlated with project performance if a formal project management process is used; however these partnerships are associated with a lower performance for loosely managed projects. In contrast, science-based partnerships are associated with higher project revenues for loosely managed projects only.
ISSN:0048-7333
1873-7625
DOI:10.1016/j.respol.2013.12.008