INNOVATION CAPABILITY AND OPEN INNOVATION AND ITS IMPACT ON PERFORMANCE IN SMES: AN EMPIRICAL STUDY IN CHILE

The objective of this research is to analyse how risk-taking, commitment to learning, and innovation capability - in SMEs - can favour inbound and outbound open innovation practices, and if open innovation practices help their performance. To test the hypotheses simultaneously, partial least squares analysis (PLS-SEM) was used along with the empirical data obtained from 194 interviews with Chilean's executives of manufacturing SMEs between 10 and 250 employees. The results obtained show that commitment to learning and risk-taking have a positive effect on innovation capability. Our study has shown how innovation capability has a significant and positive influence on inbound and outbound practices. In the field of performance, our research has verified that inbound practices have a positive influence on the performance of the SME. Finally, it shows managers the way to select open innovation practices that most benefit the strategic objectives of the SME.