The Effect of Open Innovation Implementation on Small Firms' Propensity for Inbound and Outbound Open Innovation Practices

Small- and medium-sized enterprises (SMEs) face limited resource capability to implement open innovation. Understanding a robust mechanism of knowledge management, organisational structure, and networks can benefit managerial and organisational drivers to achieve open innovation in general. The paper sheds the new light in developing the open innovation implementation as a latent endogenous variable influence inbound OI and outbound OI. We used structural equation modelling (SEM) on a data set of 636 Thai SMEs. The results reveal that open innovation implementation reflected by managerial and organisational dimensions has a positive impact on contributing to both inbound and outbound OI. A key finding is that open innovation's diffusion helps SMEs to overcome their technological capabilities to implement OI.