Exploring the non-linear relationship between open innovation and ESG-focused resilience in complex innovation ecosystems

Abstract

Organizational resilience has become an important strategic concern as firms increasingly operate under environmental, social, and governance (ESG) pressures and sustainability transitions. While prior research has examined the role of open innovation and dynamic capabilities in shaping firm performance and adaptability, most studies assume that the relationships are linear. However, in complex innovation ecosystems, capability development and external engagement may exhibit non-linear effects, where increasing levels of openness and capability intensity can lead to diminishing or even adverse outcomes beyond certain thresholds. This study addresses this gap by examining the potential non-linear relationships between the degree of openness (as a proxy for open innovation), ESG-related dynamic capabilities, and ESG-focused resilience. In particular, the research investigates whether openness, network embeddedness, environmental dynamism, and dynamic ESG capabilities influence firms’ resilience in curvilinear ways. Using survey data from 154 Thai listed firms, the study applies polynomial regression analysis to identify both linear and quadratic effects among the key variables. The results show that the degree of openness exhibits a statistically significant inverted U-shaped relationship with ESG-focused resilience, suggesting that excessive openness may reduce resilience due to coordination complexity and knowledge integration challenges. In addition, dynamic social capability demonstrates a significant non-linear relationship with ESG-focused resilience, suggesting that its effect on resilience is limited at low levels but becomes increasingly positive as firms accumulate sufficient capability maturity and organizational learning, while dynamic environmental capability does not exhibit a statistically significant non-linear effect.