Are outliers more disruptive? Technological niche, disruptive innovation, and recombinant capability

Whether disruptive technologies are more likely to emerge at the margin or the core of industry has been a long‐debated issue. We theorize the relationship between technological niches and the generation of disruptive innovations. Introducing the main path analysis, we develop a novel indicator to depict firms' technological niche in a focal industry's technological landscape and link it to their performance of disruptive innovation. Further, we investigate its boundary condition by taking firms' recombinant capabilities into consideration. A sample of 29,655 USPTO patents of the electric communication industry (H04W/L) for the period 1995–2019 is used to test our hypotheses. Our research reveals an inverted U‐shaped relationship between a firm's technological niche and its disruptive innovation performance. Besides, firms' recombinant capability could moderate the relationship by steepening the curvilinear. This paper helps reconcile the long debated question of ‘ Are Outliers More Disruptive ’ by providing a contingency perspective and identifying a non‐monotonic relationship.