Network inertia and inbound open innovation: is there a bidirectional relationship?

Based on the patent data collected from smartphone industry over the period 2000-2017, we utilize two-stage least squares to investigate the bidirectional relationship between network inertia and inbound open innovation practices. Furthermore, our research is of great benefit to better understanding of the interplay of network reach and network centrality on network inertia and inbound open innovation, and the moderating effects of network centrality on the reciprocal relationship between network inertia and inbound open innovation practice. The empirical results confirm that there is a bidirectional relationship between network inertia and inbound open innovation, and network centrality shows the moderating effect on the above relationship. Moreover, network centrality moderates the positive effects of network reach on network inertia and inbound open innovation. These findings suggest that network centrality and network reach are important factors of the firms' network inertia and inbound open innovation. The results of the models in this paper suggest that firms with higher network inertia in the innovation networks are less likely to search for sources outside their boundary. In summary, we fill the research gap in exploring the bidirectional relationship between network inertia and inbound open innovation.