The Effect of Macro Environmental and Firm-Level Factors on Open Innovations in Product Development and Their Impact on Firms’ Performance

Most research on open innovation and product development concentrates on developing effective collaborative models to develop competitive products. Little research considers macro environmental and firm-level factors while developing such models. These factors can possibly affect outsourcing innovations in product development and later overall firm performance. As such, this research investigates how macro environmental and firm-level factors link with open innovations in product development and their relationship with the firm’s overall performance. First, the conceptual framework of outsourcing innovations was synthesized from open innovation and business partnership related literature. A total of 60 intensive R&D-based firms were surveyed in 20 countries concerning the effects of macro environmental and firm-level factors on product development and its performance. Statistical techniques were used to analyse the data. The collected data helped to identify seven important macro environmental and firm-level factors. The results provided support for the conceptual framework and described the impact of all factors on developed product performance and the firm’s overall performance in the given market. An implication for managers is that the provider’s host country environment has no direct impact on a firm’s performance.