Innovation performance in service companies and KIBS vis-à-vis manufacturing: the relevance of absorptive capacity and openness

Abstract Purpose: The present paper adds to the most recent current of literature that highlights the importance of innovation in services, analyzing a setting - Portugal - which is relatively backward in terms of innovation performance. Design/methodology/approach: Based on a sample of 4128 companies (including 1489 service companies) that answered the Community Innovation Survey 2008, we assessed, by resorting to logistic regressions, the determinants of innovation performance in Portuguese companies. Findings: 1) Workers who have the 1st cycle of higher education have a positive and significant impact on the innovation of service companies whereas PhDs are detrimental to companies’ innovative performance; 2) Companies in the service sector in general, and in KIBS in particular, that effectively invest in external and (continuous) internal R&D activities are more innovative; 3) External scientific sources of information for innovation are crucial (and much more than in manufacturing) to the innovation performance of service companies, especially of KIBS; 4) Similarly to manufacturing, participation in innovation activities in cooperation with foreign partners appears as a key factor in the innovative performance of service companies. Originality/value: The study demonstrates the influence of companies’ openness and the relative importance attributed to different sources of information for innovation on innovation outcomes of service companies (and KIBS) compared to manufacturing industries.