Learning from External Network and a Firm’s New Product Innovation: An Abstract

Abstract

Entrepreneurial orientation helps the firms pursue entrepreneurial opportunities and create competitive advantages in changing and dynamic environments by promoting innovativeness, risk-taking, and proactiveness. However, inconsistent results were found in the relationship between entrepreneurial orientation and performance. The inconclusiveness motives the researchers to investigate the potential moderating variables in order to understand the boundary effect. One important moderator—learning—is still missing in the link of entrepreneurial orientation-new product innovation performance. Learning is viewed as a valuable asset to the firm’s innovation development, especially for high-technology firms.

In this study, I propose that the relationship between entrepreneurial orientation and new product innovation performance may be moderated by external network learning besides the firm’s age and size. In this study, external network learning is defined as knowledge acquisition from outside external networks (such as suppliers, distributors, retailers, banks, government contacts, university contacts, technology search firms, consultants, and employment agencies, etc.). Literature suggests that external network learning may help the firm to expand its knowledge base, provide a fresh perspective, improve breakthrough thinking, and enhance the recognition of opportunities and threats and scarce resource access to new market, technological capabilities, and political legitimacy, etc. These benefits serve as complementary resource to entrepreneurial orientation and can effectively strengthen the relationship between entrepreneurial orientation and new product creativity/speed to market.

A large-scale survey in China was conducted to test the hypotheses. In order to reduce common method bias, two respondents were chosen from each firm to measure different constructs. A total of 300 respondents from 150 high-tech firms answered the questionnaires. A structural equation modeling and reliability tests were used for data analysis.

The findings confirm the positive effect of entrepreneurial orientation on both new product creativity and new product development speed. While the firm’s age and size mostly change the strength of the relationship between entrepreneurial orientation and new product innovation performance, external network learning fosters the impact of entrepreneurial orientation on new product innovation performance. This finding suggests that the entrepreneurial firm’s managers should invest time and effort on building relationship with various external networks and having active interaction with them, because the knowledge learned from external networks may improve the entrepreneurial oriented firm’s new product innovation performance.