Innovation generation and appropriation: the dual roles of political ties in Chinese firms' new product development

The evidence about how political ties affect new product development in Chinese firms remains inconclusive. This article joins this debate by integrating innovation generation and appropriation into a unifying framework, and empirically examining the relationships among political ties, new product innovation advantage, and new product performance. Survey results from 272 Chinese firms show that in the innovation-generation stage, political ties affect new product innovation advantage through acquisitive and experimental learning benefits. Differently, in the innovation-appropriation stage, political ties function as a social appropriability regime that enhances the effect of new product innovation advantage on new product performance. Therefore, political ties play dual roles in Chinese firms' new product development. We also suggest notable cautions regarding their possible dark side effects. Implications and future research directions are provided in the end.