Continuous innovation failure, top management team relational capital and the overseas R&D activities of companies in emerging economies

Failure is an unavoidable part of the innovation process. Previous studies have explored the impact of innovation failures on a variety of strategic actions. However, to date, whether and when firms – especially those in emerging economies – adopt overseas research and development (R&D) strategies in response to innovation failures remains unexplored. By integrating insights from the behavioural theory of the firm (BTOF) and springboard theory, our study theoretically analyzes and empirically examines the impact of continuous innovation failure on the overseas R&D activities of companies in emerging economies. Using a dataset comprised of Chinese listed manufacturing firms, we find that continuous innovation failure is positively related to the overseas R&D activities of companies in emerging economies. After considering the moderating effect of top management team (TMT) relational capital, we also find that TMT financial relational capital weakens the above relationship, while TMT government relational capital strengthens it.