Abstract: Open innovation has become a hot topic in both theoretical and practical circles, but few studies have explored the influence factors and effects of open innovation in the group framework from the perspective of internal and external networks. Business group plays a significant role in China, which is a consortium of interests of semiautonomous firms bound through multiplex ownership and social ties. Different from the standalones, the subsidiary has the characteristics of dual network, which means that it is not only able to cooperate with external stakeholders for innovation, but also rely on the group network for innovation practice. There is little research on how subsidiaries in business groups use their unique intranet advantages for open innovation. In this paper, from the perspective of network, we construct the theoretical model of internal and external network and open innovation, and discuss the influence of different types of open innovation and its interaction on innovation performance. Our research advances the existing literature in primary two ways. Firstly, we contribute to the literature about introverted and extroverted open innovation. Apart from the influence mechanism of introverted and extroverted open innovation on innovation performance, this paper also explored the interaction between the two types of innovation, which makes up for the deficiency of existing theoretical research. Secondly, the paper studies the difference and contingency of the influence of internal and external networks on the two types of open innovation under the business group framework, so as to further enrich the theoretical research on the innovation management of the group company. In addition, the research conclusions can provide reference for the implementation of the open innovation strategy of subsidiaries, and has important value for improving the innovation performance of subsidiaries and promoting the sustainable growth of business groups.Drawing on existing research, open innovation can be divided into introverted open innovation and extroverted open innovation. Introverted open innovation refers to the process of integrating external innovation resources into internal ones and absorbing, utilizing and commercializing them in a planned way, while extroverted open innovation refers to the process in which enterprises export their valuable innovation resources to the outside and authorize other subjects to absorb, integrate and commercialize. Data in this paper were obtained from a questionnaire survey conducted in 2017 to subsidiaries with R&D functions within the framework of national business groups, and 105 valid questionnaires were finally obtained. The research shows that: On the one hand, the introverted open innovation is positively correlated with the innovation performance of subsidiaries, which indicates that the introverted open innovation of subsidiaries promotes the improvement of innovation performance. Extroverted open innovation is also positively correlated with innovation performance, so the extroverted open innovation can promote the innovation performance of the subsidiary. What’s more, the interaction coefficient between introverted open innovation and extroverted open innovation on innovation performance is significantly positive, indicating that introverted open innovation and extroverted open innovation promote each other in the process of improving the innovation performance of subsidiaries. On the other hand, the internal network is positively correlated with the introverted open innovation at the significance level of 1%, while the relationship between the external network and the introverted open innovation is not significant, indicating that the internal network has a better promotion effect on the introverted open innovation. Similarly, external network is positively correlated with extroverted open innovation, while the relationship between internal network and extroverted open innovation is not significant, indicating that external network has a better promoting effect on it. Finally, the interaction between the internal network and the external network was positively correlated with the extroverted open innovation at the significance level of 10%, indicating that the internal network would strengthen the positive role of the external network in the process of extroverted open innovation, but the regression coefficient between the interaction and the introverted open innovation did not pass the significance test. In a word, both introverted and extroverted open innovation can promote the innovation performance of the subsidiary and both of them can promote each other; internal network and external network of business groups play different promoting roles on the different types of open innovation of the subsidiary companies, the internal network plays a stronger role in promoting the introverted open innovation, while the external network plays a stronger role in promoting the extroverted open innovation; in the process of extroverted open innovation, the internal network will strengthen the positive role of external network.Based on the research conclusions, we can get the following enlightenment: firstly, enterprises should actively build a two-way open innovation platform. Enterprises should not only fully absorb and make use of the technology and knowledge of various external innovation subjects such as scientific research institutions, upstream and downstream enterprises and enterprises in the same industry, but also actively export internal innovation achievements for other enterprises in the group, alliance partners and other cooperation subjects. It can not only enhance the innovation enthusiasm and enthusiasm of R&D personnel inside the enterprise, form a good innovation organization atmosphere, but also build the industry standard based on the internal technology of the enterprise in the external market, and effectively alleviate the business risk caused by innovation failure. Secondly, while making full use of the internal network of the group, the subsidiaries should actively explore and embed the external network to build a network ecosystem. Network construction and management ability is the key ability for enterprises to achieve long-term development and growth in the context of increasingly fierce market competition and increasingly complex development environment. Open innovation is a complex strategic action, which means that enterprises need to be set into different types of network, and constantly improve the network process of cooperation, achieve rapid exchange of technology, make external advantageous resources into the internal of internal innovation. At the same time, enterprises should effectively embed in the industrial chain, integrate various resources, use the technological achievements of opening to the outside world for output and value creation, and enhance their own production and innovation capacity.

Key words: introverted open innovation, extroverted open innovation, internal network, external network, innovation performance