Impact of Technology Recombination on Construction Firm Performance: Evidence from Chinese Construction Sector

Technological recombinant innovation (TRI) has been regarded as an important part of technological innovation in the construction industry. However, the pattern of how TRI affects the performance of construction firms is still unclear. Building upon architectural innovation, this study identifies the exploratory and exploitative TRIs and explores the mediating mechanism of business models, by which TRIs influence a firm's performance. Using text mining, panel data analysis of 107 China-listed construction firms was conducted to analyze the relationships. The results show that the positive relationship between exploratory TRI and firm performance is weakened by novelty-centered business model, while the negative effect of exploitative TRI on firm performance is strengthened through its mediation. This research enriches the literature on the relationship between technological innovation and firm performance by highlighting the important role of TRIs in predicting firm performance and differentiating mediating mechanisms for the two types of business models. In addition, the application of text mining to quantitatively evaluate the types of business model from the annual reports of listed construction firms, provides a new quantitative evaluation method for the research of business models.