On Innovative Search: the use of internal and external sources of innovation among Finnish innovators
Paananen, Mikko (2012-12-14)
Väitöskirja
Paananen, Mikko
14.12.2012
Lappeenranta University of Technology
Acta Universitatis Lappeenrantaensis
Julkaisun pysyvä osoite on
https://urn.fi/URN:ISBN:978-952-265-313-0
https://urn.fi/URN:ISBN:978-952-265-313-0
Tiivistelmä
This dissertation explores the use of internal and external sources of knowledge in
modern innovation processes. It builds on a framework that combines theories such as
a behavioural theory of the firm, the evolutionary theory of economic change, and
modern approaches to strategic management. It follows the recent increase in
innovation research focusing on the firm-level examination of innovative activities
instead of traditional industry-level determinants. The innovation process is seen as a
problem- and slack- driven search process, which can take several directions in terms
of organizational boundaries in the pursuit of new knowledge and other resources. It
thus draws on recent models of technological change, according to which firms
nowadays should build their innovative activities on both internal and external
sources of innovation rather than relying solely on internal resources. Four different
research questions are addressed, all of which are empirically investigated via a rich
dataset covering Finnish innovators collected by Statistics Finland. Firstly, the study
examines how the nature of problems shapes the direction of any search for new
knowledge. In general it demonstrates that the nature of the problem does affect the
direction of the search, although under resource constraints firms tend to use external
rather than internal sources of knowledge. At the same time, it shows that those firms
that are constrained in terms of finance seem to search both internally and externally.
Secondly, the dissertation investigates the relationships between different kinds of
internal and external sources of knowledge in an attempt to find out where firms
should direct their search in order to exploit the potential of a distributed innovation
process. The concept of complementarities is applied in this context. The third
research question concerns how the use of external knowledge sources – openness to
external knowledge – influences the financial performance of firms. Given the many
advantages of openness presented in the current literature, the focus is on how it
shapes profitability. The results reveal a curvilinear relationship between profitability
and openness (taking an inverted U-shape), the implication being that it pays to be
open up to a certain point, but being too open to external sources may be detrimental
to financial performance. Finally, the dissertation addresses some challenges in CISbased
innovation research that have received relatively little attention in prior studies.
The general aim is to underline the fact that comprehensive understanding of the
complex process of technological change requires the constant development of
methodological approaches (in terms of data and measures, for example). All the
empirical analyses included in the dissertation are based on the Finnish CIS (Finnish
Innovation Survey 1998-2000).
modern innovation processes. It builds on a framework that combines theories such as
a behavioural theory of the firm, the evolutionary theory of economic change, and
modern approaches to strategic management. It follows the recent increase in
innovation research focusing on the firm-level examination of innovative activities
instead of traditional industry-level determinants. The innovation process is seen as a
problem- and slack- driven search process, which can take several directions in terms
of organizational boundaries in the pursuit of new knowledge and other resources. It
thus draws on recent models of technological change, according to which firms
nowadays should build their innovative activities on both internal and external
sources of innovation rather than relying solely on internal resources. Four different
research questions are addressed, all of which are empirically investigated via a rich
dataset covering Finnish innovators collected by Statistics Finland. Firstly, the study
examines how the nature of problems shapes the direction of any search for new
knowledge. In general it demonstrates that the nature of the problem does affect the
direction of the search, although under resource constraints firms tend to use external
rather than internal sources of knowledge. At the same time, it shows that those firms
that are constrained in terms of finance seem to search both internally and externally.
Secondly, the dissertation investigates the relationships between different kinds of
internal and external sources of knowledge in an attempt to find out where firms
should direct their search in order to exploit the potential of a distributed innovation
process. The concept of complementarities is applied in this context. The third
research question concerns how the use of external knowledge sources – openness to
external knowledge – influences the financial performance of firms. Given the many
advantages of openness presented in the current literature, the focus is on how it
shapes profitability. The results reveal a curvilinear relationship between profitability
and openness (taking an inverted U-shape), the implication being that it pays to be
open up to a certain point, but being too open to external sources may be detrimental
to financial performance. Finally, the dissertation addresses some challenges in CISbased
innovation research that have received relatively little attention in prior studies.
The general aim is to underline the fact that comprehensive understanding of the
complex process of technological change requires the constant development of
methodological approaches (in terms of data and measures, for example). All the
empirical analyses included in the dissertation are based on the Finnish CIS (Finnish
Innovation Survey 1998-2000).
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