How does market learning affect radical innovation? The moderation roles of horizontal ties and vertical ties

Purpose This paper aims to investigate the curvilinear effects of firms’ market learning on radical innovation and the moderation effects of the focal firms’ horizontal ties and vertical ties. Design/methodology/approach This study uses regression analysis with the survey data from 303 Chinese firms. Findings Explorative/exploitative market learning has an inverted U-shaped/U-shaped effect on radical innovation. The effects of explorative market learning on radical innovation increase when firms have strong horizontal ties, but decrease when firms have strong vertical ties. The opposite is true for the effects of exploitative market learning. Research limitations/implications This study uses unilateral data to examine the moderation effects of the focal firms’ vertical and horizontal ties on the market learning-radical innovation links. Future research that conducted in the dyadic-paradigm would be preferable to test the generalizability of this research and address the potential changes. Originality/value The value of the current study centers on its integrated framework that incorporates organizational learning theory and the social network perspective to account for radical innovation. The integrative view helps us to interpret the curvilinear effects of market learning on radical innovation and outlines the moderation mechanisms of horizontal ties and vertical ties.