Abstract

This paper examines the effects of the geographic boundary and location of open innovation. The research questions are as follows: a) does the geographic boundary of open innovation have a significant influence on the innovative performance of a firm? ; and b) does the geographic location of open innovation, that is the cluster that the firm belongs to, have a significant influence on the innovative performance of a firm?

Firm-level data of 365 firms was collected from two different regional clusters. Using two independent variables and other control variables (firm age, size, and R&D intensity), we analyzed the effects of these variables on firm performance by using ordinary linear and negative binominal regressions. Based on the results, we suggest for firm-level decision-makers that geographic boundary of external knowledge sources should be balanced between within and beyond clusters according to the characteristics of the clusters. Furthermore, policy-makers should develop programs so that industrial firms can access valuable sources and collaborate with other sources that are beyond clusters, not just within.