The mediating impact of knowledge-based HRM practices on the relationship between transformational leadership and open innovation

Purpose This paper aims to examine the mediating role of knowledge-based human resource management (KBHRM) practices in the relationship between transformational leadership (TL) and open innovation for Lebanese manufacturing companies. Blending the Knowledge-Based View (KBV), leadership theory and HRM, the present paper aims at explaining the influence of TL on inbound and outbound open innovation through knowledge-related practices. Design/methodology/approach A cross-sectional survey of 370 Lebanese manufacturing companies was conducted, and 255 usable questionnaires (69% response rate) were retrieved. A structured format questionnaire was utilized to quantify TL dimensions, KBHRM practices and open innovation activities. Reliability and validity tests, confirmatory factor analysis and structural equation modeling (AMOS) were conducted to test hypothesized relations. Mediation analysis was conducted using bootstrapping to identify indirect effects. Findings The results illustrate the presence of strong and positive correlations among TL, KBHRM practices and open innovation. TL emerged as a strong predictor of KBHRM practices (β = 0.949), inbound innovation (β = 0.674) and outbound innovation (β = 0.428). KBHRM practices were positively influencing inbound (β = 0.25) and outbound innovation (β = 0.28). Mediation results further indicated that KBHRM practices had a significant mediating effect in projecting TL’s impact to open innovation outcomes with large indirect effects. Originality/value It is a contribution to the Knowledge-Based View since it empirically verifies KBHRM as a dynamic capability that converts leadership into knowledge-based innovation outcomes. To the best of the authors’ knowledge, it is the first scholarly work to explore KBHRM as a mediator of TL and open innovation in an emerging-economy context and offer theoretical contributions and managerial/practical implications.