External Knowledge Search, Organizational Proximity, and Innovation Performance in South Korean SMEs

Abstract

In todays world, many of the firms have stepped towards open innovation to find their innovative performance rather than the concept of closed innovation. The concept of open innovation is to find external knowledge from variety of outside environment or source rather than internally. We adopt the concept of breadth and depth in order to explain how searching widely and deeper can affect firms innovative performance. Our explanation on breadth and depth takes a shape of inverted U-shaped relationship to innovative performance. In order to moderate the relationship of breadth and depth to innovative performance, organizational proximity is adopted in respect to SMEs characteristic trait of innovation. This study will show how adopting organizational proximity can have a positive effect on firms innovative performance.