Volume 29, Issue 4, 2020
DOI: 10.24205/03276716.2020.808
Open-Innovation and Knowledge Management in Small and Medium-Sized Enterprises (SMEs): The role of External Knowledge and Internal Innovation
Abstract
Small and medium-sized enterprises (SMEs) are the backbone of every economy worldwide. However, SMEs are not active in open innovation (OI) activities which limits the overall performance. To address this issue, this study carried out to examine the effect of external knowledge (EK), internal innovation (II) and knowledge management (KM) on firm’s OI performance. This study followed the quantitative research approach and cross-sectional research design. Moreover, this study is limited to the SMEs located in Bahawalpur district, Pakistan. Data were collected from the managerial employees. Partial Least Square-Structural Equation Modeling (PLS-SEM) was used to analyze the data. Findings of the study revealed that EK and II has significant contribution to enhance OI in SMEs. Additionally, it is found that KM mediates the relationship of EK and II with OI. Thus, this study is beneficial for SMEs to increase their performance by increasing OI activities through effective KM.
Keywords
SMEs, external knowledge, internal knowledge, open innovation, Knowledge management.