Learning to innovate: How and when firms transform intellectual capital into exploratory and exploitative innovation
Research Summary Corporate entrepreneurship (CE) requires firms to pursue both exploratory and exploitative innovation, yet limited research explains how intellectual capital (IC) is translated into these distinct outcomes. We develop a contingency model that specifies how and when IC drives exploration and exploitation. We theorize that a firm's capacity for learning and transformation (CLT) functions as a firm‐level learning and transformation capability through which IC can be translated into either exploratory or exploitative innovation. Knowledge breadth strengthens the indirect effect of IC on exploratory innovation via CLT, whereas knowledge depth amplifies the indirect effect on exploitative innovation. We test the model in two complementary field studies. Study 1 employs a time‐lagged design with objective archival data, and Study 2 replicates the findings using survey data. Results consistently support the proposed theoretical model. Managerial Summary Firms operating in fast‐changing and uncertain environments often struggle to balance developing new products with improving existing ones. Our study shows that simply having strong knowledge resources is not enough. What matters is how effectively firms learn from and use that knowledge. We find that firms perform better when they build strong learning capabilities that help them adapt, recombine, and apply knowledge over time. Importantly, the type of knowledge a firm holds shapes this process: broad knowledge supports new product development, while deep, specialized knowledge strengthens improvements to existing products. For managers, this means focusing not only on acquiring knowledge but also on building systems and practices that continuously translate knowledge into action and innovation.
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- 10.1002/sej.70028
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