Research On The Effect Mechanism Of Managerial Interpretation On Firm External Knowledge Search

In the rapidly changing and intensively competitive environment, how can the firms acquire and maintain sustainable competitive advantages faces new challenges. In this dynamic environment, business executives' managerial interpretations of corporate environmentalism will play key roles in companies' environmental reactive strategies, so as to affect the firms' adaptabilities to the changing environment.This study links managerial interpretation to firm's external knowledge search and examines the moderating roles of managerial ties and long-term reward system in this relationship respectively. Drawing on managerial interpretation theory, social network theory and innovation search perspective, we develop and test hypotheses using a sample of 141 technology ventures in China.We find that:(1) opportunity interpretation is positively related to both search depth and search breadth, whereas threat interpretation is negatively related to search depth. (2)Managerial ties significantly moderate the relationships between managerial interpretation and external knowledge search breadth and depth. (3)Long-term reward systems significantly moderate the relationship between managerial interpretation and external knowledge search and depth.These results highlight the critical contingent effects of managerial ties and long-term reward on the link between managerial interpretation and external knowledge search. Importantly, we extend innovation search research by highlighting how managerial interpretation and managerial ties, also the reward system, jointly determine search strategies of external knowledge. Further, we add to the literature on managerial ties and reward system design by drawing attention to the role of opportunity interpretation and threat interpretation whereby firms can strategically self-regulate both search breadth and search depth of external knowledge.