Is There Any Difference in the Effect of Open Innovation According to the Product Life Cycle? : Revisiting the Relationship Between Product Life Cycle and Trade

Abstract

Chesbrough (2003) demonstrated that open innovation has a positive effect on firm performance. Chesbrough specially focused his analysis on the performances of open innovation of firms in the mature stage of product life cycle. This study attempts to examine the relationship between the extent of open innovation and its effect on a firm’s performances in different stages of product life cycle sectors in Korean circumstances. Product life cycle has deep a relationship with the international trade. In the U.S. specially,emerging and growth-stage products were exported but maturing and decline-stage products were imported (Wells, 1968, p. 4). If we know the relationship between open innovation and product life cycle, we can build up new strategy about international trade and commodity trap which are coupled with open innovation. This study also tries to derive answers to the following questions:(1) Is open innovation more actualized in emerging or growth-stage sector than in mature and declining-stage sector?(2)Isthe effect of open innovation on a firm’s performance inemerging or growth stage greaterthan mature and declining-stage firms?