External Knowledge Search and Innovation Performance in Iranian Biopharmaceutical Firms: The Mediating Role of Knowledge Integration Capability

Abstract

Background: In the biopharmaceutical sector, characterized by rapid technological change and intense market competition, external knowledge search (EKS) has become a strategic necessity to overcome the limitations of closed innovation. However, while EKS is widely studied in developed economies, its underlying mechanisms remain underexplored in emerging biopharmaceutical sectors. Objectives: This cross-sectional study examines how EKS affects innovation performance (IP) in Iranian biopharmaceutical firms, testing the mediating role of knowledge integration capability (KIC) and the moderating effect of R&D intensity, while controlling for firm size and age. Methods: Data were collected using a validated questionnaire completed by 92 senior executives (CEOs, R&D, and Business Development managers) from 44 Iranian biopharmaceutical companies. The model was analyzed using partial least squares structural equation modeling (PLS-SEM) in SmartPLS. Results: EKS significantly enhances both IP (β = 0.462, P < 0.001) and KIC (β = 0.239, P < 0.003). KIC positively influences IP (β = 0.437, P < 0.001) and partially mediates the EKS-IP relationship (indirect effect β = 0.104, P = 0.02). R&D intensity showed no significant moderating effect (β = 0.198, P = 0.10). The model explains 40.5% of IP variance (R² = 0.405). Firm size (β = 0.009, P = 0.924) and age (β = 0.030, P = 0.792) had no significant effects. Conclusions: The impact of EKS on IP depends more on a firm’s KIC than on its R&D intensity. This study advances open innovation theory by clarifying how external knowledge is effectively translated into innovation outcomes within an emerging biopharmaceutical context.