The imitation-innovation link, external knowledge search and China's innovation system

Purpose: The authors attempt to answer the basic questions: How is imitation tied to innovation? This question is addressed in the context of China's innovation system in the 2000s where Chinese industrial firms simultaneously implement innovation and imitation strategies in their new product developments. Design/methodology/approach: The authors first build on lattice theory and supermodularity theory to provide a rigorous and careful mathematical proof. The authors further conduct the empirical analyses using an original data on Chinese manufacturing firms' innovation and imitation strategies in the development of new products in 2002. Findings: This article reveals the complementarity relation between imitation and innovation strategies and identifies external knowledge search as the boundary condition that influences the extent to which two strategies reinforce each other. Research limitations/implications: The findings of the imitation-innovation complementarity suggest that imitation is not only an indispensable strategy independent of innovation, but also is vital to the effectiveness of innovation itself. Practical implications: The imitation-innovation complementarity finding provides some evidence for the contention that Chinese latecomers exploit the synergies of imitation and innovation, transforming themselves from imitators to innovators and vibrant competitors in the global market (Wu et al., 2016) and, as a result, national innovation system has evolved from a state-sponsored imitation program to the imitation-innovation mixture. Originality/value: In contrast to earlier innovation studies in which innovation and imitation are unrelated, this study reveals that imitation complements innovation, and the extent of Chinese firms' external knowledge search affects the complementary relationship between imitation and innovation. These findings add important insights to the innovation management literature and contribute empirical evidence to the interplay of innovation and imitation enhancing national innovation system.