This document outlines a presentation on a study examining the relationship between outbound open innovation strategies and firm performance. The presentation includes sections on open innovation definitions, theories of outbound open innovation and environmental moderators, hypotheses, methodology used in the study, results, discussion and conclusion. The study found that outbound open innovation has a positive effect on firm performance and that this relationship is moderated by factors like patent protection, technological turbulence, transaction rate, and competitive intensity.

1. Outbound open innovation & its
effect on firm performance:
examining environmental
influences-by Ulrich Lichtenthaler.
PRESENTER: DANIEL LAMECK
12 TH NOV.2013

2. Outline
Introduction
Segment of innovation
Outbound & inbound open innovation
Open innovation
Theories of outbound open innovation
Theories of environmental moderators
Hypotheses of the theories
 out licensing
Corporate strategies
Methodology
Discussion and conclusion .

3. Introduction
There are two dimensions firms opt for innovation
Inbound innovation and
Outbound innovation
Author of this article discusses the relationship between outbound
open R&D strategies and firm performance

4. Segment of innovation
Tradition(closed innovation)
Focus on internal development of new tech.& apply to their own
products
Open innovation
Large volume of technologies acquired from external source
Coupled innovation
Involves internal and external technology sources and external
technology commercialization channels

5. Outbound & inbound open innovation
Outbound
Its an outward technology transfer where by firms can seek for
external organizations with business models suitable to commercialize a
technology or addition to its internal application
Inbound
Its an inward technology transfer which leverage the discoveries of
others because firms need not to rely on their own r&d.

6. Open innovation
(A)outbound open innovation
Outward technology transfer whereby firms can look for external
organizations with business models that’s suits to commercialize a
technology exclusively or adds to its internal application.
(B) Inbound open innovation
Inward technology transfer which describes the practice of leveraging
the discoveries of others because firms need not to rely exclusively own
their own R&D.

7. Theories -0utbound open innovation
Outbound open innovation and firm performance
Refers to systematically relying on firm`s dynamic capabilities of
internally and externally carrying out the major technology
management tasks along the innovation process.
Although outwards technology its not the core activity of most
companies, some pioneering firms have achieved major benefits.
Closed innovation strategies limit the return on firm`s R&D
expenditures because they lead to lower licensing revenues, which
often carry high profit margins.

8. Theories-Environmental moderators
Patent
protection
Competitive
intensity
Environmental
Transaction
rate
Technological
turbulence

9. Hypothesis-01
Patent protection
Moderates relationship between outbound open innovation and firm
performance
Regarded as an essential facilitator of successful outbound open
innovation
Strong patent protection affects a firm`s possibilities of profiting from
outbound open innovation

10. Hypothesis - 02
Technological turbulence
Moderates the relationship between outbound open innovation and
firm performance
Technological turbulence which describes the rate of technological
change reduces a firms' possibilities of capturing value from its
technologies.
As consequence, higher technological turbulence increases a firms`
benefits from pursuing an outbound open innovation strategy

11. Hypothesis-03
Transaction rate
Moderates the relationship between outbound open innovation and
firm performance.
A higher degree of market perfection based on frequent transactions
seems to constitute a facilitator of additional interfirm technology
transfers.
A high rate of technology transactions helps firms to capture the
benefits from outbound open innovation strategies.

12. Hypothesis-04
Competitive intensity
Moderates relationship between outbound open innovation and
performance
Competitive intensity in technology markets may affect the outcome of
open innovation strategies
Firms may achieve higher performance increases from outbound
innovation despite additional competition that they face in technology
market.

13. Out licensing- e.g. Texas instruments
By means of outbound open strategies: Firms attempt to achieve monetary & strategic opportunities
 Firms are reluctant to transfer technologies, reasons can be;
Fear to strengthen competitors by selling “corporate crown jewels”
pioneering firms like Texas instruments -annual licensing revenues
Texas Instruments Inc. is an American company that designs and makes
semiconductors, which it sells to electronics designers and
manufacturers globally

14. Corporate strategy
Outbound open innovation regarded as
Part of corporate strategy where by;
Firms simultaneously exploit technology inside and outside
For instance IBM –achieved benefit by relying on open innovation strategic decision.
IBM-licensing revenue of more than $ 1.2 billion in 2004(corporate strategy)
Involves major risks:
•weakens firms competitive position based on transferring relevant knowledge.
•Firms focuses on their products business rather than transfer technology
As the results firms experience difficulties.

15. Suggestion
 formulate an open innovation strategy which guides firms` individual
“keep or sell” decision in addition to “make or buy”
Methodology
Scholars used two data set-survey from Lichtenthaler &
Ernst`s(2007)study and combined with performance data from financial
database and annual reports.
155 firms participated, response rate 37.6%
Used linear regression models then
Test for moderating effects, moderated multiple regression analyses
Shown on table 1&2

16. Analytical procedures

17. Results of regression

18. Cont. methodology
Outbound innovation strategy
Measurements comprised four items on firms` willingness to commercialize all
technological knowledge.
Firm performance
Used a popular financial indicator of profitability,(ROS),to measure firm
performance.
Environmental moderators
Which includes construct of patent protection, importance of technological
change, transaction rate and competitive intensity
Control variables
Firm size ,R&D intensity, cross industry approach and country of origin

21. Discussion
Firms should not focus on established closed innovation strategies
Study provides reasons to managers to open up the innovation
processes of their companies
Results emphasize the importance of outbound open innovation
because open strategies significantly contribute to firm performance.

22. Conclusion
This studies expressed the importance and positive effect of outbound
open innovation strategies on firm performance.
Its among the first rare quantitative empirical studies that
demonstrates a positive relationship between outbound open
innovation and firm performance.

23. c.