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Do consumers in countries that differ widely in cultural values and in economic development also differ in their resistance to innovations? And, if so, why? Addressing these questions will help international marketing managers formulate an appropriate strategy for a successful product introduction in diverse foreign markets. In this five‐country study, the cultural values of fatalism, traditionalism, and religious commitment were found to explain cross‐cultural variation in innovation resistance in Senegal and in the United States, but not in India, South Korea, or Thailand. Even though the results were different for every country, fatalism was generally associated with less willingness to try new non‐technical products and with higher levels of perceived product risk. Differences were found to be related to entertainment and media innovations as opposed to technical or fashion‐oriented innovations. The results do not support the contention that a global, standardised marketing strategy may be appropriate for the introduction of new products in foreign markets.

The purpose of this paper is to discover the economic effects of open innovation investigated the following research questions: do economic effects of open innovation – a certain economic phenomenon or economic paradigm that surpasses the level of the management strategies of individual enterprises – exist? If so, what are the economic effects?

The authors analyse the change of classical economic characteristics, such as diminishing marginal products, economy of scale, and X-inefficiency, which are selected by literature review to find out the effects of open innovation. The authors select long-tailed phenomena and App Store phenomena, which are a direct result of open innovation. From these, the authors find out the effects of open innovation.

Through exploratory-level studies, the economic characteristics of open innovation have been identified: gradual increases of marginal products, the economy of diversity, and X-efficiency improvement.

These three economic characteristics of open innovation have been verified through secondary analysis methods based on the long-tailed phenomenon and App Store phenomenon. Open innovation triggers new economic effects. Thus, the authors should create new strategies and policies to treat open innovation that are based on additional deep research.

This paper introduces new ideas about open innovation in economics.

According to the findings, open innovation will give the authors new ways to develop continuously in a knowledge-based economy.

For the first time, the authors understand the economic value of open innovation and its implications.

The purpose of this study is to theoretically clarify under which circumstances MNCs should outsource the innovation function. In the globalization era, multinational companies (MNCs) face the challenge of making a strategic decision. They ought to adjudicate upon outsourcing the research and development, i.e. innovation function and bearing the risks of it, or keeping innovation function in house and paying the price of this decision. This decision becomes more crucial when the host country has dissimilar characteristic and high uncertainty compared to the home country.

This study is among the very first studies that evaluate the issue of outsourcing innovation for MNCs from a transaction cost economics (TCE) theoretical perspective. By setting forward propositions that serve as a guideline for conditions in which MNCs should outsource innovation, this paper contributes to innovation, new product development, global business and, last but not least, to the TCE literature. This study also provides managerial implications and avenues of future research for academicians.

This study shows that heterogeneity between the home and host country affects the autonomy of the innovation at the host country; this autonomy in turn leads to higher transaction cost, and finally, transaction cost is the main determinant of the decision on whether to outsource the innovation.

This study fills this gap by looking at the problem of outsourcing innovation from a TCE theoretical perspective and, based on an extensive literature review, puts forward a set of propositions that clarify under which circumstances MNCs should outsource the innovation function.