Institutional Embeddedness of Search Strategies and the Implications for Innovation Performance

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    Abstract

    The innovation performance of modern firms is increasingly determined by their ability to search and absorb external knowledge. However, after a certain threshold firms “oversearch” their environment and innovation performance declines. In this paper, we argue that prior literature has largely ignored the institutional context that provides or denies access to external knowledge at the country level. Combining institutional and knowledge search theory, we suggest that the market orientation of the institutional environment and the magnitude of institutional change influence when firms begin to experience the negative performance effects of oversearch. Based on a comprehensive sample of almost 8,000 firms from ten European countries, we find that institutions matter considerably for firms’ search activity. Higher market orientation of institutions increases the effectiveness of firms’ search for external knowledge while higher magnitudes of institutional change decrease it. Our results provide important insights for management on how to adapt search strategies to the institutional
    context.
    Original languageEnglish
    Title of host publicationProceedings of the 55th Annual Meeting of the Academy of International Business
    EditorsPatricia McDougall-Covin, Tunga Kiyak
    Place of PublicationEast Lansing, MI
    PublisherAcademy of International Business
    Publication date2013
    Pages168-169
    Publication statusPublished - 2013
    EventAIB 2013 Annual Meeting : Bridging the Divide: Linking IB to Complementary Disciplines and Practice - Sabancı University, Koç University, and Özyeğin University, Istanbul, Turkey
    Duration: 3 Jul 20136 Jul 2013
    Conference number: 55
    http://aib.msu.edu/events/2013/

    Conference

    ConferenceAIB 2013 Annual Meeting
    Number55
    LocationSabancı University, Koç University, and Özyeğin University
    CountryTurkey
    CityIstanbul
    Period03/07/201306/07/2013
    Internet address
    SeriesAcademy of International Business. Annual Meeting. Proceedings
    Volume55
    ISSN2078-4430

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