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Small Business Economics

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14-05-2019

Does organizational structure facilitate inbound and outbound open innovation in SMEs?

Authors: Simona Gentile-Lüdecke, Rui Torres de Oliveira, Justin Paul

Published in: Small Business Economics | Issue 4/2020

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Abstract

Based on the evolutionary theory of the firm, this paper examines how traditional variables that describe a firm’s organizational structure—formalization, specialization, and centralization—affect the adoption of inbound and outbound open innovation. Using a cross-sectional survey of Chinese small and medium enterprises, our study shows that organizational structure matters for open innovation and that formalization, specialization, and centralization have diverse effects on the OI practices implemented by SMEs. Results indicate that specialization and centralization have a critical role in open innovation practices as they both foster the use of inbound and outbound open innovation. Formalization negatively affects outbound, but it is positively associated with inbound open innovation.

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In this research, we refer to selling and revealing as per Dahlander and Gann’s (2010) definition. Revealing refers to internal resources that are revealed to the external environment, and selling refers to how firms commercialize internal knowledge through licensing or selling.

According to recent official data (China Statistics Press 2016), in 2015, SMEs made up about 97.9% of all registered companies in China. They also contributed nearly 58% of gross domestic product (GDP) and employed about 82% of the total workforce, being responsible for nearly 75% of the new jobs every year.

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Title: Does organizational structure facilitate inbound and outbound open innovation in SMEs?
Authors: Simona Gentile-Lüdecke
Rui Torres de Oliveira
Justin Paul
Publication date: 14-05-2019
Publisher: Springer US
Published in: Small Business Economics / Issue 4/2020
Print ISSN: 0921-898X
Electronic ISSN: 1573-0913
DOI: https://doi.org/10.1007/s11187-019-00175-4

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