Networking for sustainability: Alliance capabilities and sustainability-oriented innovation

Research on open innovation and sustainability suggests that alliances with external stakeholders help to improve innovation outcomes. This paper taps into the intersection of these literatures and investigates how alliance proactiveness and alliance portfolio coordination affect firms' sustainability-oriented innovation (SOI) outcomes. Data were collected from 170 firms in the Basque Country region in Spain, which has a highly collaborative regional innovation system. Partial least squares (PLS) modeling confirmed that alliance proactiveness is positively related to radical SOI, while alliance portfolio coordination is positively related to incremental SOI. In addition, these two capabilities involve a positive interaction effect in the case of radical SOI. An additional set of post hoc tests using latent class analysis (FIMIX-PLS) provided further evidence that firms with different internal features and levels of environmental turbulence benefit to varying extents from these capabilities and their interactions. Overall, the findings of this study show the benefits of the coupled mode of open innovation and alliance capabilities in reaching positive outcomes in SOI. On the one hand, companies focusing on incremental SOI can reap greater benefits from open innovation when collaborating within their existing portfolio; while for radical SOI, alliance proactiveness is beneficial for finding disruptive partners.