Abstract
This study investigates the role of openness to innovation knowledge sources in driving firms’ radical innovation. First, we develop a theoretical model that predicts how political ties and business ties can be used by firms as a complementary mechanism to capitalize on their preferential resources. This complementary mechanism is more effective than relying on a single kind of tie. Moreover, using Chinese firm-level data, we find that openness has a curvilinear relationship with firms’ radical innovation performance. Second, we show that the joint interaction effects of political ties and business ties significantly influence firms’ openness to engaging in radical innovation.
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