Open innovation and strategic agility in business performance

Purpose Despite growing recognition of open innovation's (OI) importance for firm competitiveness, limited empirical evidence exists on how OI translates into performance outcomes in resource-constrained small and medium-sized enterprises (SMEs), particularly regarding the mechanisms through which this relationship operates. This study aims to investigate the impact of OI practices on strategic agility and organizational performance among SMEs in Tunisia, examining the mediating role of strategic agility in this relationship. Design/methodology/approach This study adopts a quantitative approach, drawing on the dynamic capabilities framework and OI theory. A structured questionnaire was administered to 300 SMEs in Tunisia across various industries using convenience sampling. Data analysis was conducted using partial least squares structural equation modeling (PLS-SEM) to assess the relationships between OI, strategic agility and firm performance. Findings The study reveals that OI positively influences both strategic agility and firm performance. Strategic agility partially mediates the relationship between OI and performance, demonstrating how SMEs transform external knowledge and collaborative practices into competitive advantages. The results show that OI practices enable SMEs to develop enhanced sensing, seizing and reconfiguring capabilities that constitute the core components of strategic agility. Research limitations/implications The study is limited by its cross-sectional design and focus on SMEs in Tunisia, which may limit generalizability to other contexts. The reliance on single-source data may introduce common method bias. Future research could extend this model to SMEs in other emerging economies, employ longitudinal designs to validate causal relationships and explore additional moderating variables influencing the OI-performance link. Practical implications The findings offer actionable insights for SME managers, emphasizing the importance of adopting OI practices to enhance agility and improve performance. Managers should develop balanced portfolios of inbound, outbound and coupled innovation activities while investing in organizational systems that support strategic agility. Policymakers can use these results to design initiatives that foster collaborative innovation through innovation infrastructure development and capability-building programs. Social implications By demonstrating how SMEs in resource-constrained environments can leverage OI for competitive advantage, this study contributes to economic growth, job creation and enhanced competitiveness in emerging markets. The findings provide pathways for sustainable economic development in Tunisia and similar developing economies facing globalization pressures. Originality/value This study makes three distinct contributions: first, it empirically validates strategic agility as a mediating mechanism linking OI to performance in an under-researched context; second, it extends dynamic capabilities theory by demonstrating its applicability in resource-constrained SMEs within emerging economies, and third, it provides context-specific evidence from Tunisia, addressing the geographic bias in innovation management research that predominantly focuses on developed economies.