Combinations of knowledge sources for product innovation based on the degree of novelty: Evidence from Peru

This research aims to unveil the combinations of knowledge sources that influence the degree of innovation novelty or radicalness (products new-to-firm and new-to-market). Exploratory and confirmatory factor models and bivariate probit regression are applied on a sample of Peruvian manufacturing companies made available by the Peruvian National Innovation Survey. The results show two combinations. Firstly, the combination of internal sources (within the firm or business group) with the knowledge of customers, suppliers, and competitors, which are related to the new-to-firm and new-to-market product innovations. Secondly, the combination of knowledge from universities, public research institutes, and consultants/private R&D institutes, which are related to new-to-market product innovations. This study contributes to the literature by revealing the combinations that influence the degree of novelty or radicalness of innovation in Peru, which represents the search strategies and knowledge combinations to achieve innovation at firm level. The study also provides evidence of how knowledge generated by other companies in the business group or consultants/private R&D institutes contributes to the firm innovative. The practical implications of this research rely on understanding how strategy makers can promote the management of different knowledge sources in companies and their combinations to achieve product innovations based on the degree of novelty.