Technology Embeddedness, Innovation Differentiation Strategies and Firm Performance

Chinese manufacturing firms have been pursuing strategic upgrading from traditional low-cost manufacturing strategies to innovation differentiation strategies since China's reforming and opening. Under such research backgrounds, this paper proposes that relational technology embeddedness and structural technology embeddedness as well as the interaction between them have positive impacts on firm performance, and their influences on firm performance are mediated by firm's innovation differentiation strategies. Using data from 182 Chinese sample firms in east China, this paper attests that relational technology embeddedness and structural technology embeddedness have positive impacts on firm performance, and such influences are mediated by innovation differentiation strategies. The result also shows that the interaction between relational technology embeddedness and structural technology embeddedness has a direct impact on firm performance, not being mediated by innovation differentiation strategies.