The External Knowledge Utilization and Radical Innovation in Korea Electronic Industry

Purpose - This study investigates the moderation effect of internal factor, a firms size, on the external knowledge sourcing strategy and its effectiveness in generating radical innovation. We incorporate concepts of breadth and depth as two measures to gauge the degree of openness in firms external search Research design and methodology - The dependent variable in the regression model is the percentage of innovative sales and therefore, Tobit regression is employed for estimating significant factors affecting on the ratio of first-to-market by breadth and depth in external knowledge, internationalization, and size. Results - The results show that the external knowledge, in terms of both breadth and depth, has a positive relationship with radical innovation. However internationalization as external knowledge resources is not statistically accepted. Firm size has moderating effect on innovation negatively only in case of using external knowledge resources to a high degree. Conclusions - Firms obtain external information mostly from customers, competitors, and suppliers etc. empirical knowledge in terms of scope and intensity is an important contributor to innovation. And intensity use of external knowledge and information resources can work in favor of smaller firms rather than larger ones. Internationalization seems to have little effect on innovation but it requires further researches with clear criteria and more data.