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Introduction
Corporate finance researchers generally agree that the main objective of a company is the maximisation of value (e.g. Berk and DeMarzo, 2016; Brealey et al., 2015; Damodaran, 2006; Guatri, 1991; Jensen, 2001). In particular, for listed companies, the concept of value refers to the maximisation of the stock price (Damodaran, 2006), which is affected by strategic and financial decisions.
Value creation is influenced by both internal improvement (e.g. research and development (R&D) process) and external development (e.g. mergers and acquisitions (M&As), joint ventures and open innovation practices), which are processes to create and sustain a competitive advantage (Ferraris et al., 2017). Moreover, innovation has long been identified as an engine of competitiveness and growth.
In this sense, the links between competitive advantage and innovation, which allow to underline the importance of the innovation process for firms’ competitiveness, are widely studied in the literature (Chatzoglou and Chatzoudes, 2017; Kuncoro and Suriani, 2018; Reed et al., 2012). During the last decade, new managerial techniques have affected the way of performing innovation.
Until 2000, innovation was reached through so-called “close innovation”, in which the development goals were achieved inside the companies, especially through the R&D process. Since 2000, a new concept of innovation has arisen, open innovation (Chesbrough, 2003), which can be defined as a practice that allows companies to develop competitive advantage through internal and external resources in an environment that is steadily evolving and making the competitiveness more difficult.
In particular, on the one hand, many studies have investigated the relationship between competitive advantages and value creation (e.g. Bughin and Copeland, 1997; Damilano et al., 2018; Hawawini et al., 2002; Liu and Mantecon, 2017), highlighting that a sustainable competitive advantage is fundamental for long-term investors due to its role in achieving greater returns than the cost of capital (Barney, 1991; Copeland et al., 1990; Rappaport, 1986). On the other hand, it is recognised in the literature (e.g. Chesbrough, 2006; Reed et al., 2012; Vanhaverbeke et al., 2008) that the implementation of open innovation practices is a source for building a competitive advantage for the firm, with many benefits (e.g. the reduction of costs and some types of investment and the improvement of company competitiveness and innovation process).