Drivers of Innovation Performance and Firm Performance: Examining the Inter-Relationship of Risk-Taking, Risk Management and Open Innovation

Abstract

This study empirically examines how risk-taking and risk management affect open innovation (OI) and innovation performance in terms of new product or service success (NPS) and new product or service innovativeness (NPI) and analyses how OI is related to innovation performance and firm performance, utilising a combination of survey and secondary data. To test the proposed hypotheses, we perform structural equation modelling (SEM) based on a sample of 309 German firms. Our findings show that a higher level of risk-taking, as well as more extensive risk management, is associated with an increased OI intensity. Additionally, we find that supporting a positive attitude towards risk-taking, implementing risk management and engaging in OI increases the innovation performance of a firm. However, we can only detect an indirect relationship between OI and firm performance. Overall, our findings contribute to research on drivers and outcomes of OI and drivers of innovation and firm performance.

The link between supply chain risk management and innovation performance in SMEs in turbulent times

“…Bromiley et al (2017) argue that for proper risk minimisation, all SMEs control the critical issues, and they try not to leave any space for failure. Durst et al (2019) could empirically show that the management of risks related to knowledge can impact the innovativeness of organisations while Lendowski et al (2022) found in their study of German firms a positive attitude to risk taking activities along with proper RM increases innovation performance. On the other hand, having too tight controls and excessive RM practices in conjunction with innovation activities can reduce the room available for discovering and learning from failures and mistakes, which can affect innovation capacity negatively (Bowers and Khorakian, 2014).…”

Business model innovation decisions: the role of group biases and risk willingness

“…While some authors claim that high risk-taking attitudes hinder innovation efforts (e.g. Brooks et al ., 2023), others state that a positive attitude to risk taking, coupled with effective risk management, can enhance innovation performance (Lendowski et al ., 2022). Laukkanen and Patala (2014) suggested that an overly negative attitude towards risk hinders successful implementation of BMI.…”