Open innovation is crucial for Chinese 'Little Giant' enterprises as it addresses resource shortages and high innovation costs. However, there is limited research on the relationship between open innovation and enterprise growth performance, particularly for 'Little Giant' enterprises. This study adopts a quantitative approach, collecting data from 400 senior administrators in Chinese 'Little Giant' enterprises using a 5-point Likert scale. Data were gathered via structured questionnaires and analyzed through descriptive analysis, reliability and validity analysis, correlation analysis, and regression analysis. Key findings indicate that inbound open innovation significantly enhances growth performance directly and through potential and realized absorptive capacities. Effective resource acquisition and integration foster competitive advantage, while organizational forgetting mediates this relationship, aiding in the absorption and application of new technologies and enhancing innovation and growth. This study contributes to the literature by integrating enterprise growth theory, innovation theory, and resource dependence theory, elucidating the critical roles of absorptive capacities and organizational forgetting in the relationship between open innovation and growth performance. However, the study is limited by its focus on 'Little Giant' enterprises in China and reliance on self-reported data, which may introduce biases and limit generalizability. Future research should include more diverse samples from different industries and geographic contexts and incorporate longitudinal and qualitative methods to understand better the evolving dynamics and subjective experiences of firms engaged in open innovation practices.