Organizational Learning, Internal Control Mechanisms, and Indigenous Innovation: The Evidence from China

Abstract

Setting in China's emerging economy, this study examines the underlying working mechanisms through which acquisitive learning and experimental learning produce positive impacts on indigenous innovation. We theorize that behavior control and output control will have different moderating effects on the learning and indigenous innovation relationships. Empirical analyses of a survey dataset of 607 Chinese firms provide supporting evidence to the theoretical model advanced in this study. Experimental learning mediates the relationship between acquisitive learning and indigenous innovation. Behavior control negatively moderates the relationship between acquisitive learning and indigenous innovation, while positively moderates the relationship between experimental learning and indigenous innovation. The moderating effects of output control on the relationships between both types of learning and indigenous innovation are significant and inverse-U-shaped. The paper concludes with a discussion of the relevant theoretical contributions and practical implications stemming from these findings, study limitations, and potential future research directions.