Performance effects of external search strategies in European small and medium-sized enterprises

Empirical studies on open innovation lack evidence on the performance impact of open innovation (OI) practices in different categories of small and medium-sized enterprises (SMEs). Our study explores how two inbound OI practices, external search and protection of Intellectual Property (IP) rights, affect SME innovation performance. The findings indicate a heterogeneous performance impact of open innovation. The only search strategy that positively affects innovation performance in micro and medium firms is customer involvement, whereas small firms benefit from formal protection mechanisms of IPs. These findings suggest managerial and policy implications for promoting open innovation in European SMEs.