Boundary-spanning demand-side search and radical technological innovations in China : The moderation of innovation appropriability

Purpose The purpose of this paper is to explore how boundary-spanning demand-side search (BSDSS) fuels radical technological innovations as well as how innovation appropriability moderates this relationship. In particular, based on Teece’s (1986) argument regarding the appropriability of innovation, the authors divide factors to influence innovation appropriability into two types: external institution related and internal capability related. Design/methodology/approach This study employs a survey methodology. Specifically, the authors collected a sample composed of 150 high-tech manufacturing Chinese firms. Findings Results show that BSDSS has a positive effect on radical technological innovations. Further, the authors find that dysfunctional competition and political ties negatively moderate the main effect, whereas firms’ legal and IPRs protection capabilities positively moderate the main effect. Research limitations/implications One major limitation is that the findings are based on data derived from Chinese firms, which may limit the generalization of the findings. Practical implications The findings suggest that firms competing Chinese market, both Chinese and foreign firms, should actively leverage BSDSS to boost radical technological innovations. Chinese firms should pay attention to the negative roles of appropriability hazards originating from external institutional environment. Foreign firms in Chinese market should be cautious on potential dysfunctional competition from local competitors, such as imitation and intelligence property violation, and enhance appropriability through building internal capabilities, such as legal and IPRs capabilities. Originality/value The study highlights the crucial roles of BSDSS in radical technological innovations, as well as the moderating roles of innovation appropriability. These results provide new insights into the drivers of radical technological innovations.