Open for innovation: An improved measurement approach using item response theory

Abstract

Drawing on the theoretical foundations of attitudes and their role in the decision process underlying open innovation (OI) adoption, this study conveys a new perspective of examining firm-level openness as a construct. Based on Item Response Theory, a family of latent trait models rooted in psychology, and using data from the German section of the Community Innovation Survey, we advance a nuanced measure of openness capturing the firm-level attitudes toward external knowledge reception, going beyond current measures focusing on its attributed effects. This approach, based on an implicit attitude measure, allows us to assess the types of OI practices characterizing firms with different value structures (i.e., higher/lower attitudes toward external knowledge), thus offering a more reliable comparison of firms along the openness continuum. A systematic comparison with the widely used measures of external search breadth and depth shows that higher openness is not merely reflected by a higher number (or a more intensive use) of external knowledge sources but by a higher attitude toward complex search patterns, typically implying more challenging OI activities. The proposed construct has strong external validity, as it reflects the key theoretical features of openness and its paradoxes - an inverted U-shaped relationship with innovation performance. The results of this study provide both theoretical and practical implications.