Innovation search and technological catch-up in China’s latecomers: moderating effects of knowledge governance

Purpose Building on the literature on innovation search, technological catch-up and the knowledge-based view, this study provides a nuanced understanding of the relationship between formal search (FS) and/or informal search (IS) and technological catch-up performance (TCP), with emphasis on the moderating role of knowledge governance. Design/methodology/approach We tested the hypotheses through hierarchical multiple regression analysis using data from 284 manufacturing firms located in China’s coastal provinces exhibiting latecomer characteristics. Findings The empirical findings reveal that innovation search, categorised into FS and IS in this study, has an inverted U-shaped effect on TCP. Additionally, contract mechanisms strengthen the curvilinear relationship between FS and TCP whilst simultaneously mitigating the effect of IS. In contrast, trust mechanisms (TM) positively moderate the inverted U-shaped relationship between innovation search and TCP. Furthermore, this study demonstrates that the combined use of contract and TM amplifies the impact of innovation search on TCP. Originality/value This study extends the antecedents of latecomer firms’ technological catch-up from an innovation search perspective, empirically demonstrating inverted U-shaped relationships between both FS and/or IS strategies and TCP. Furthermore, it identifies knowledge governance as a key moderating factor, thereby advancing insights into the boundary conditions of the innovation search – catch-up relationship.