The effects of search breadth and search depth on the product innovation of young firms: Evidence from Thai manufacturing industry

Type of the article: Research Article AbstractWhile the majority of open innovation literature focuses on established firms, this study extends the existing literature by examining young and newly market-entrant firms. The purpose of this study is to investigate the impact of two open search strategies – search breadth and search depth – on the product innovation of young firms. The study focuses on the manufacturing industry due to its higher propensity for product innovation compared to the service sector. The data were collected via a postal survey of manufacturing firms in Thailand, conducted between March and August 2021. Respondents consisted exclusively of CEOs or senior managers, yielding a final sample of 423 firms for analysis. The analysis employed Negative Binomial Regression (NBR), a statistical method suitable for data violating the mean-variance equality assumption inherent in this dataset. The results reveal that search breadth exerts a statistically significant positive influence on product innovation. An inverted U-shaped relationship between search breadth and product innovation is not statistically significant. Search depth has a statistically significant negative effect on product innovation. Finally, an inverted U-shaped relationship between search depth and product innovation is statistically significant, indicating that greater search depth corresponds to diminished innovation. In summary, the findings suggest that search breadth benefits product innovation in young firms, whereas search depth hurts their product innovation.