Determinants of knowledge search strategy of Chinese SMEs

As a major producer of products and services in global markets, China is building up innovation capabilities. Chinese small-and-medium enterprises´ innovation depends not only on the internal R&D, but also on searching more and more outside knowledge. In this study, we investigate which factors may influence the knowledge search strategy. Those factors include competitive strategy, resources and environment. Based on the survey of EDRC, the results show that (1) cost leadership strategy may lead to more knowledge search than differentiation strategy in Chinese SMEs; (2) cost leadership strategy, absorptive capacity, environmental uncertainty and organizational change have the positive influence on the search depth; (3) resource slack has an inverse U-shape effect on search breadth; and (4) the relationship between competitive strategy and search depth is negative moderated by the environmental uncertainty. Specifically, firms´ size and export ratio have no significant influence on knowledge search strategy.