Strategic intent as a contingency of the relationship between external knowledge and firm innovation

Abstract

The effects of searching for external knowledge on firm innovation vary, as demonstrated by evidence reporting positive linear, negative linear, or curvilinear relationships. We use ambidexterity theory to explain how the exploratory and exploitative aspects of knowledge search and strategic intent can complement each other. Specifically, we theorize that a firm & rsquo;s dominant logic creates an overall strategic intent & ndash; exploration or exploitation & ndash; through the firm & rsquo;s structured interpretation and use of information, which creates a differential effect on the relationship between search practices and firm innovation. In particular, exploratory intent accentuates the positive effects of external search by enabling the assimilation of external knowledge, while an exploitative intent attenuates the positive effects of a search by limiting the use of external information to improving current products. Analyzing firm-level survey, financial information, and the number of patents of 380 firms, we provide empirical support for the effects of a dominant strategic intent on external searches and firm innovation.