Knowledge recombination, environmental turbulence and firms' innovation quality: the evidence from Chinese pharmaceutical industry

Abstract

Purpose Shifting focus from innovation quantity to innovation quality becomes a priority in innovation study, business and policy. This paper aims to figure out whether and how knowledge recombination (recombinant exploration/recombinant exploitation) affects firms' innovation quality (technological value/economic value) and how these relationships are moderated by environmental turbulence (technological turbulence/market turbulence) in the context of open innovation. Design/methodology/approach A panel data set is built on 373 Chinese pharmaceutical firms' patents and new product data from 1997 to 2020. And a negative binomial regression model is applied to test the hypotheses. Findings The analyses indicate that (1) recombinant exploration favors technological value but hinders economic value, while (2) recombinant exploitation benefits both. Regarding environmental turbulence's moderating effects, (3) technological turbulence has opposite moderating effects on the impacts of recombinant exploration versus exploitation on technological value, whereas (4) market turbulence benefits the impacts of both on economic value. Practical implications This research provides the answer to practitioners' question that “How to improve innovation quality?” That is “Think from a recombination logic, clarify your internal value preference and the external turbulence.” Originality/value From an emerging perspective of innovation, this research expands the innovation quality research to a recombination logic. A multi-dimensional research framework is developed to clarify the complex relationships between knowledge recombination and innovation quality. Finally, two moderators, technological versus market turbulence, formulate more targeted implications for firms' innovation management in open innovation.