Integrative Capability, Product Innovation, and the Moderating Role of Proactiveness and Technological Environment

Integrative capability refers to a firm's ability to purposefully acquire, combine and deploy resources that are available in business partnerships for achieving managerial visions. Research has yet to explore the benefits of integration in partnerships for different types of product innovation despite the increasingly importance of inter-firm relationships for technology transfer and product innovation. This study proposes that integrative capability has curvilinear and differential effects on explorative and exploitative innovation. Based on multi-soured survey data from 212 Chinese firms, the findings support the proposition that integrative capability has a positive linear effect on exploitative innovation, but an inverted U-shaped relationship with exploration. That is, a high level of integrative capability impedes explorative innovation. The findings also indicate that proactiveness strategy moderates the integrative capability and exploration relationship, mitigating the decline in exploration at a higher level of integrative capability. In addition, under the unique context of emerging economies, technological turbulence enhances the benefits of partnership integration on both explorative and exploitative innovation.