How does the Second-order Learning Moderate the Relationship between Innovation Inputs and Outputs?

Abstract

We investigate how the second-order learning process moderates the relationship between innovation performance and two types of knowledge seeking behavior, namely exploration and exploitation. We reinvestigate the second-order learning process of the top 100 Korean firms from 1997 to 2007 by capturing CEO turnovers, Board turnover and R&D alliances. We argue that the current findings about exploration and exploitation should be reclassified in the form of innovation inputs and outputs. We further suggest that researchers need to investigate organizational learning process in understanding the link between innovation inputs and outputs. Our empirical results show that innovation inputs are not related to the exploratory outputs, but the second-order learning process reshapes the relationships between both exploration/exploitation-type innovation inputs and exploratory innovation outputs. Our study shows how the new focus of organizational learning process can refine the current innovation literature.