How does IT capability affect open innovation performance? The mediating effect of absorptive capacity

Purpose - Open innovation and information systems have been key topics in the theoretical domain, but little empirical research thoroughly examines how information technology (IT) capability affects open innovation performance. Thus, the purpose of this paper is to explore the relationship between IT capability and open innovation performance and to expose the inner mechanism at the firm level. Design/methodology/approach - This paper collected firm-level data in China; 232 usable questionnaires from different firms were collected. Then, the study used a structural equation model by AMOS for hypothesis testing. Findings - The results indicate that both internal IT capability and external IT capability have positive impacts on open innovation performance; potential absorptive capacity and realized absorptive capacity mediate the relationship between external IT capability and open innovation performance. Additionally, realized absorptive capacity plays a mediating role in the relationship between internal IT capability and open innovation performance. Practical implications - These findings indicate that practitioners should pay attention to the important relationship between absorptive capacity and IT capability and open innovation performance in Chinese businesses. Originality/value - Existing research has emphasized the influence of IT on open innovation, but empirical studies have not thoroughly focused on the inner mechanisms of the effect of IT capability on open innovation performance. Drawing on firm capability theory, this paper classifies IT capability as internal and external IT capability and absorptive capacity as potential and realized absorptive capacity. Then, this paper confirms the mediating role of absorptive capacity between IT capability and open innovation performance.