Technological diversification, environmental regulation and technological innovation performance in chemical firms

This present study aims to investigate the impact of related technological diversification (RTU) and unrelated technological diversification (UTD) on the firm-specific technological innovation performance by studying the moderating factor of environmental regulation intensity. In prior studies, the theoretical rationales and empirical results between technological diversification and technological innovation performance appeared to contradict each other. These contradictory results may be due to no distinguishing the types of technological diversification or a linear understanding of the relationship between diversification strategies and firm's technological innovation performance (TIP). Using the data for the period from 2010-2014 panels on chemical listed companies in A-share in China, the results of this study provide strong supports for the premise that RTD positively affects TIP, while the UTD has an inverse U-shaped influence on the TIP. Besides, this study also finds that the environmental regulation intensity positively moderates the relationship between both of RTD, UTD and firm's TIP. By addressing the need for deeper diverse analysis, hence, this study contributes to the debate on the role of technological diversification in influencing TIP, not only by examining how the diverse nature of technology base impacts innovation outcomes, but also by revealing how the impact of both of RTD and UTD are contingent upon environmental regulation intensity condition. The article also discusses the theoretical and managerial implications of the findings.