Examining the effects of governmental networking with environmental turbulence on the geographic searching of business model innovation generations

Abstract

Purpose This study aims to explore the relationship between geographic search and business model innovation and proposed a contingent framework to focus on how governmental networking and environment turbulence are interdependent moderate the relationship between geographic search and business model innovation. Design/methodology/approach A large-scale questionnaire survey was carried out among the firms in three high-tech parks of the Pearl River Delta, with a total of 287 firms as empirical samples. Hypotheses are tested using ordinary least squares analyzes on hierarchical multiple regression to find out how geographic search can drive business model innovation generations. Findings The empirical results showed that the more frequent geographic search is, the more favorable it is for firms to generate innovative business models, and firms may be more effective in geographic searching and business model innovation with better governmental networking. However, the above relationship may be weakened if the environment turbulence in emerging markets is further considered. It was argued that firms must take into account both the positive effects of governmental networking and the negative effects of environmental turbulence in conducting a geographic search for external knowledge resources to generate innovative business models. The study results showed how and why governmental networking can be a key catalyst for firms to generate innovative business models. Research limitations/implications This study contributes to the business model innovation literature by documenting the large-scale survey evidence that confirms the practicality of geographic search in the business model innovation generations. The findings advance previous studies in the business model innovation by identifying the moderating roles of governmental network and environment turbulence that predict business model innovation behaviors in the emerging market. Practical implications The results indicate that the geographic search can be easily operationalized for external resources acquisitions by managers in generating business model innovation. This has applications for external resource acquisitions on the basis of business model innovation in the emerging China market. In addition, to facilitate the business model innovation generations, the focus should be on critical contingency factors; on the one hand, to promote the continued use of external resources, the focus should be on enhancing benefits such as governmental networking. Originality/value The findings extend existing theory in three ways as the original value. First, the results show that geographic search is an important driver of business model innovation generations in an emerging market context. Second, this study is the first to take organizational learning and open innovation perspective to examine geographic search as a boundary-spanning search of external resources in business model innovation generations. Third, this study also explores the moderator role of governmental network and environmental turbulence on how to strengthen or impair the geographic search and business model innovation generations.