Absorptive capacity is a popular concept in contemporary management literature (Jasimuddin, Li & Perdikis, 2015; Naqshbandi & Jasimuddin, 2018). Cohen and Levinthal (1990) define it as the firm's ability to recognize the value of external knowledge, assimilate and use for commercial ends. The notion of absorptive capacity is described as a dynamic capability by some scholars. In this regard, Zahra and George (2002) define absorptive capacity as the ability of a firm to explore and exploit the knowledge. Parallel to this, Kotabe, Jiang and Murray (2011) go further by contending knowledge acquisition can only enhance new product market performance with the presence of realized absorptive capacity.

Managerial ties are known to positively affect firm performance (Jiang, Guo, Wei & Wang, 2018). Managerial ties help organizations acquire knowledge and ideas that the organizations use for multiple beneficial purposes (Colyvas et al., 2002; Dahlander & Gann, 2010; Gassmann, Enkel & Chesbrough, 2010). Similarly, managerial ties with varied external sources of knowledge help organizations make the best use of the knowledge resources available within the firm's boundaries (Chesbrough & Crowther, 2006; Dyer & Singh, 1998). Therefore, many organizations prefer to share valuable their knowledge via advanced and elastic networks to get maximum benefits from the internal and external knowledge sources (Dittrich & Duysters, 2007; Jasimuddin, 2018).

While managerial ties with managers working at other firms are a good source of knowledge, managers' associations with other research and educational institutions also facilitate organizational innovation by providing systematic and technical assistance (Peng & Zhou, 2005). Additionally, organizations can receive several benefits (e.g., related to technology and human resources) and gain institutional support (Li & Zhou, 2010; Luo & Tung, 2007) by establishing managerial relationships with government officers (Peng & Luo, 2000). At the same time, to make the most use of the ties of their managers, organizations need to enhance their absorptive capacity to build internal resources by exploring and utilizing external ideas and knowledge (Lichtenthaler, 2009). Su and Yang (2018) report that a positive linkage exists between managerial ties and exploratory innovation which is strengthened by an organization's absorptive capacity. It is thus important to improve the innovative environment inside the organizations for smooth functioning and strong associations among workers (Barney, 1986; Vrontis, Bresciani & Giacosa, 2016).

The managerial ties can enhance organizations' absorptive capacity and help them obtain, integrate, and assimilate the externally available information (Naqshbandi, 2016). At the same time, the vital role of absorptive capacity in supporting inbound open innovation is highlighted by several past studies (Kyriakopoulos & De Ruyter, 2004; Minbaeva, Pedersen, Björkman, Fey & Park, 2003; Naqshbandi, 2016; Parida, Westerberg & Frishammar, 2012). Also, the impact of managerial ties and absorptive capacity on innovation is explained by Gao et al. (2008). Several other studies (e.g., Cohen & Levinthal, 1989; Wang & Han, 2011) have also noted that the organizations that own internal knowledge resources possess higher levels of absorptive capacity for better exploitation of external information and ideas. Further, Naqshbandi (2016) studied the underlying mechanism of how absorptive capacity plays a role in the relationship between managerial ties and open innovations. The fact that the organizations in which managers have strong bonds with other organizations are well placed in gaining and using the external knowledge resources in multiple ways. Based on these arguments, we have formulated the following hypothesis.

H3

Absorptive capacity mediates the relationship between managerial ties and inbound open innovation.

The past literature makes it clear that managerial ties lead to relationship-based capabilities of the organizations (Zhang & Li, 2008) and such capabilities result in the exploration and exploitation of the external and internal knowledge resources and opportunities (Lee, Pae & Wong, 2001; Zahra & George, 2002). For the stability and prosperity of organizations in general and innovative organizations in particular, the external environment is critical (Eisenhardt & Martin, 2000). Therefore, besides being beneficial for the acquisition of new expertise, knowledge and technology, organizations need to develop and maintain strong bonds with external entities to be able to accrue maximum benefits from internal knowledge and innovative capabilities (Cohen & Levinthal, 1989; Sivadas & Dwyer, 2000; Todorova & Durisin, 2007). Spithoven, Clarysse and Knockaert (2010) stated that managerial ties facilitate the organizations to establish absorptive capabilities in multiple ways such as by developing the skills to explore and utilize the innovative capabilities in profitable ways, and by enhancing the capacity to scour and discover the opportunities for commercialization available in the external environment.

Many past studies support the role of absorptive capacity in helping organizations gain multiple forms of knowledge and using it beneficially for the organizations in different contexts (Kazanjian, Drazin & Glynn, 2000; Kyriakopoulos & De Ruyter, 2004; Lane, Salk & Lyles, 2001; Morgan-Fleming, Simpson, Curtis & Hull, 2010; Zahra & George, 2002). Based on the logic that an organization's absorptive capacity improves its awareness of itself and the opportunities available in the external environment. It follows that absorptive capacity can help an organization in exploiting externally its existing resources or technologies that would rather fit an external entity's business model more than the firm that develops the resources or technology. Based on this discussion, we propose the following hypothesis.

H4

Absorptive capacity mediates the relationship between managerial ties and outbound open innovation (Fig. 1).

Fig. 1.

Research framework.

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The current study was conducted in three diverse country contexts (France, UAE, Malaysia) to examine the association of managerial ties with inbound and outbound open innovation. Moreover, the mediating role of absorptive capacity in these relationships was also explored. Overall, the findings supported all the hypotheses, though not in all the country contexts as depicted in Fig. 2.

Fig. 2.

Analytical results.

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Note: FR, France; UA, UAE; MA, Malaysia; s, significant; ns, not significant; LLCI, lower-limit confidence interval; ULCI, upper-limit confidence interval.

Hypothesis 1 proposed a positive relationship between managerial ties and inbound open innovation and the findings in all the three-country contexts support this hypothesis. Thus, ties of managers of an organization with managers in other organizations, universities/research centers and government officials enhance inbound open innovation outcomes. The finding related to the effect of managerial ties with other managers in other organizations follows the expectations, as it is widely believed that inter-firm associations are one of the most vital sources of external ideas. These findings are broadly consistent with Qin and Shanxing (2010) study conducted in the context of manufacturing firms exhibiting innovative capabilities in China. The results also support the notion of Huston and Sakkab (2006)’s case study on Procter & Gamble, which showed that communication among stakeholders helps encourage the exchange of ideas and knowledge, resulting in enhanced innovation outcomes.

Along similar lines, Lindegaard (2011) highlighted the relevance of managerial ties with other organizations to form valuable networks that ultimately result in open innovation. Likewise, since educational and research institutions facilitate knowledge distribution and enhance innovative capabilities, it is no surprise that managers' ties with universities and/or other research centers improve in-bound open innovation outcomes. The findings are largely in line with the results of several past studies (Chiaroni et al., 2011; Cohen, Nelson & Walsh, 2002; Krapez, Skerlavaj & Groznik, 2012; Leydesdorff, 2012; Naqshbandi & Kaur, 2014; Qin & Shanxing, 2010; Tödtling, Lehner & Kaufmann, 2009). These studies emphasie the role of managerial ties with external entities and the corresponding effect on a firm's innovation performance. The finding that managerial ties with government officials also improve inbound open innovation outcomes follows logic, particularly in the case of the UAE and Malaysia, where regimes of appropriability are relatively weaker. Hence, such ties prove helpful for organizations in several aspects, including attaining their innovation-related goals (Li, 2008; Naqshbandi & Kaur, 2014; North, 2006; Peng & Luo, 2000; Shu, Page, Gao & Jiang, 2012).

Hypothesis 2 proposed a positive link of outbound open innovation with managerial ties with managers in other organizations, universities/research centers and government officials. There is hardly a study available that relates managerial ties with outbound open innovation. The findings of this study support this hypothesis in France and the UAE, but not in Malaysia. It thus follows that the ties of a firm's managers with the managers of other organizations are essential to facilitate outbound open innovation (Naqshbandi & Kaur, 2014). Similarly, the ties of managers with educational institutions and research centers are crucial for the achievement of outbound open innovation goals. The findings of this study support this notion. The past research notes on similar lines that universities and research centers are primary platforms for spreading knowledge and awareness, thus creating a fertile ground for innovative activities (Rasiah & Govindaraju, 2009).

These results align with the study of Naqshbandi and Kaur (2014), which was conducted in a multi-sector context in Malaysia. Their study analyzed the effect of different types of managerial ties on open innovation in industries with the high-tech sector in Malaysia. They concluded that in most industries and sectors, managerial ties with universities and government officials facilitate inbound open innovation while ties with managers at other firms do not affect inbound open innovation in any industry. It therefore follows that the importance of the bonds of managers of an organization with government officials can prove useful, particularly for the successful exploitation and commercialization of an organization's knowledge resources and technology. The finding of this study is also supported by the past studies which investigated the hypothesis and reported similar results (Naqshbandi, 2016; Naqshbandi & Kaur, 2014).

Hypothesis 3 of the study proposed an underlying mechanism of absorptive capacity in the association of managerial ties and inbound open innovation. This study found support for this link in two countries (i.e., France and the UAE), indicating partial support for Hypothesis 3. The extant literature supports the notion that managerial ties result in better relationship capabilities of organizations (Zhang & Li, 2008), which leads to the exploration of external opportunities, their acquisition as well as the exploitation of internal knowledge and other resources (Lee et al., 2001; Zahra & George, 2002). The results of the study found in France and the UAE are consistent with the results of Naqshbandi (2016). Naqshbandi (2016) conducted a study across multiple sectors in the UAE. They conclude that organizations with strong managerial bonds with other organizations, educational/research institutions and representatives of the government bodies are in a better position to benefit from external knowledge resources, than the organizations where managerial bonds are weak or non-existent. Further, the strong association of a firm's managers with other organizations results in an enhanced capability of gaining and utilizing external knowledge resources.

Its combination with internal resources helps the firm achieve higher absorptive capacity levels that ultimately support its innovation-related goals (Ferraris, Erhardt & Bresciani, 2017; Ferreras-Méndez, Fernández-Mesa & Alegre, 2016, 2015). The lack of support for H3 in the context of Malaysia is abstruse. It is suggested that further research look at the nuances involved. One possible way to look at the issue could be from the perspective of innovation intermediaries, studying whose role may increase our understanding of the role of absorptive capacity as well. A deeper examination into this becomes imperative. In this regard, Cohen and Levinthal (1989) and Wang and Han (2011) suggested that organizations with a good internal knowledge foundation may have a sophisticated level of absorptive capacity for better exploitation of external information and ideas.

Hypothesis 4 of the study is based on the underlying mechanism of absorptive capacity in the association of managerial ties with outbound open innovation. The findings show that the hypothesis is supported in the contexts of France and the UAE, while the data collected in Malaysia do not support this hypothesis. The supportive results for the mediating role of absorptive capacity in the contexts of France and the UAE are based on the fact that managerial ties with other organizations help an organization utilize the external knowledge resources effectively to build an innovative environment and facilitate gaining competitive advantage (Dyer & Singh, 1998).

Similarly, managerial ties with government officials facilitate the acquisition and utilization of external knowledge (Peng & Luo, 2000) which helps organizations enhance absorptive capacity (Rangus et al., 2017; Spithoven et al., 2010). This results in acquiring multiple forms of knowledge and further utilization of this knowledge to attain organizational goals (Kazanjian et al., 2000; Kyriakopoulos & De Ruyter, 2004; Lane et al., 2001; Morgan-Fleming et al., 2010; Zahra & George, 2002). The findings obtained in the contexts of France and the UAE are in line with the findings of Naqshbandi (2016) who suggested that managerial ties help managers sell improved and innovative solutions to the market for commercialization and that absorptive capacity acts as a bridge in this process. It needs further investigation as to why the hypothesis could not find support in the data collected in Malaysia. Here again, the role of intermediaries may hold the key to the understanding of why absorptive capacity mediates the managerial ties-outbound open innovation relationship in France and the UAE, but not in Malaysia.

Theoretically, this study contributes by providing a multi-country perspective to the relationship of managerial ties with inbound and outbound open innovation. A rich dataset compiled by collecting data from three countries was used to test the study's hypotheses. Being one of the first studies to do so, this study adds value by improving the generalizability of the findings and bringing greater clarity to the issue. The findings are crucial since open innovation research is maturing and themes and patterns that can apply cross-culturally need identification. The findings of the paper can be expected to benefit managers in diverse cultural setting since the data are sourced from varied cultural and country contexts.

The findings provide valuable insights for managers who may be particularly working across country borders or cultural contexts with suppliers, partners, or other external entities in a collaborative arrangement. The study also takes a nuanced approach by studying the mediating mechanism of absorptive capacity, which has often been cited as an important enabler of open innovation. From practitioners’ perspective, the findings of this study can help managers do better in acquiring and using the internal and external resources available in any form (knowledge, ideas, human resources, etc.). Managers can accordingly benefit by building and encouraging their subordinates to build strong connections/bonds/ties with managers of other organizations and universities/research centers/government representatives. By adopting a collaborative approach and a two-way exchange process in terms of knowledge and other valuable resources, managers can build valuable networks to support the innovation-related goals of their organizations.

This paper helps understand open innovation in the context of three countries (i.e., France, the UAE and Malaysia). Few studies have focused on the connection between managerial ties absorptive capacity and open innovation and again absorptive capacity and open. The study discusses and examines management ties that have an impact on open innovation. Previous research focused on identifying the determinants of open innovation that promote innovation in general without adding the role that absorptive capacity plays in that process. However, as mentioned earlier, recently several authors (e.g., Huang & Rice, 2012; Rangus et al., 2017) attempted to connect the relationship between open innovation and absorptive capacity. Very few studies have highlighted the concepts of inbound open innovation and outbound open the phenomenon when analyzing open innovation from a cross-country perspective.

Despite the increased focus on studying open innovation worldwide, the paper addresses the concepts of inbound open innovation and outbound open innovation as the key elements of the open innovation by analyzing managerial ties and absorptive capacity from a cross-country perspective. Understanding the effect of management ties on open innovation using absorptive capacity as a mediator is essential. This study adds value by bringing the mediating effect of perceived absorptive capacity in the relationship of managerial ties and open innovation (inbound and outbound) from a cross-country perspective. Our model tested the assumed direct and positive relationship between management ties and open innovation while also attempting to understand the management ties effect on open innovation, using absorptive capacity as a mediator. One of the merits of this research design is that open innovation is analyzed from a cross-country perspective, enhancing the generalizability of the findings. The article provides useful insights for practitioners who wish to enhance open innovation activities and offers useful guidance to researchers, encouraging further study in this area.