Trade-off Of Technology Search——the Moderating Role Of Organizational Slack

Open innovation becomes the mainstream of innovation paradigm. Boundary-spanning searching for external knowledge is the critical part of the open innovation. The extant literature has highlighted the importance of boundary-spanning search. Previous research has, however, almost exclusively focused on search breadth and search depth, largely ignoring the complementation or conflict among different search directions. We argue that although technology knowledge and market knowledge have inherent complementarities and their combination can improve innovation performance effectively, different search strategies each vie for scarce resources. Thus, investing intensely in a technology search may leave limited resources for a market search.Based on this paradox, this study aims to simultaneously examine the impacts of technology search and market search on product innovation in an emerging economy. Using an original data set of270manufacturing firms in China, this study finds that while technology search and market search both have positive influences on product innovation, their interaction effect is negative. We also find, however, that this negative impact can be alleviated by organizational slack. Theoretical and managerial implications are discussed.