Complementarity or substitutability? The impact of technology search on the total factor productivity of international entrepreneurial firms

Abstract

While high-value patent technology search is crucial for enhancing the total factor productivity (TFP) of international entrepreneurial firms (IEFs), its exact impact remains debated, with some studies reporting negative effects. Furthermore, how directional informal institutional distance influences this relationship remains underexplored. Drawing on recombinant search and institutional theories, we analyze panel data (2005–2024) from Chinese IEFs to examine how technology searches impact TFP and the moderating role of directional informal institutional distance. Results indicate that complementary search negatively impacts TFP, whereas substitutive search promotes it. Furthermore, informal institutional surplus positively moderates the relationship between both technology search strategies and TFP. Informal institutional deficit exerts asymmetric moderating effects: it positively moderates the impact of complementary technology search on TFP, but negatively moderates the impact of substitutive technology search. These findings not only broaden the research perspective in technology search studies but also enhance the academic understanding of the mechanisms through which institutional distance operates.