Search more deeply or search more broadly? An empirical study of external knowledge search strategy in manufacturing SMEs

Will small- and medium-sized enterprises (SMEs) in emerging economies search more deeplyor search more broadly for product innovation at high levels of environmental turbulence? Inanswering this question, unlike prior studies that treat search depth and search breadth asseparate variables to measure firms’ external knowledge search strategy, this studyintroduces a new concept, external search towards depth-dominance, to capture the trade-offbetween search depth and search breadth for SMEs in a resource-constrained context. Usingdata on 491 Chinese manufacturing SMEs, we find that SMEs search more deeply at highlevels of technological and market turbulence. Moreover, the positive relationship betweenperceived technological turbulence (or perceived market turbulence) and external searchtowards depth-dominance is stronger when the differentiation propensity of a firm’scompetitive strategy is lower. The findings contribute to the understanding of innovationsearch in a resource-constrained context and the context specificity of innovation search.