We explore the relationship between firm performance and its strategic orientation in adopting an open-approach to innovation. Based on the description of previous author, we develop a multi-item construct to measure firm-level open innovation proclivity. Open innovation proclivity assesses the company’s inclination to utilise external ideas to complement its business model to profit from innovations. This construct also measures the firm’s tendency to sell its intellectual property to outsiders to profit from others’ innovation efforts. Collecting survey data from multiple respondents with time lag from 122 Taiwanese electronic-product manufacturers, we find Taiwanese electronic companies’ proclivity to open innovation relates positively to managers’ perceived firm performance. We also find the entrepreneurial orientation of these companies positively moderates the relationship between open innovation proclivity and firm performance.
Keywords: open innovation, open innovation proclivity, entrepreneurial orientation, firm performance