How do knowledge-intensive business services improve innovation? A resource-based model for antecedents of innovation in a developing country

Purpose: Firms strive to find new ways of boosting value creation through integrating knowledge for innovation. Open innovation has altered this quest for excellence and, accordingly, this study aims to investigate the antecedents and enablers of innovation performance in firms belonging to a knowledge-intensive service sector of a developing country. Design/methodology/approach: As such, data were gathered through a survey approach, targeting telecom service firms in Pakistan. Hypotheses were tested using the partial least squares technique. Measurement and structural models were assessed following the recommended two-stage procedure. Findings: Results showed that knowledge sourcing and customer engagement impact the innovation performance of firms, whereas transformational leadership, knowledge sourcing and customer engagement are linked to innovation with the mediating effect of absorptive capacity. Practical implications: This research helps to improve the innovation management practices of the firms belonging to this important sector and thus enables them to achieve sustainable competitive advantage through building their absorptive capabilities. Originality/value: Knowledge-intensive business services are largely excluded from the great debate on open innovation so far, with a few exceptions. This research proposes and tests a model of enablers of open innovation that contributes toward improving the innovation performance of telecom firms in a developing country.