International R&D cooperation and Chinese firms’ exploitative and exploratory innovation in a bifurcated world

This study explores the impact of a focal firm’s (located in emerging economies) international R&D cooperation with partners in both emerging economies (EE) and developed economies (ED) on its exploitative and exploratory innovation in a bifurcated world. By distinguishing between EE and ED R&D cooperation, we propose a theoretical framework that explains the relationships between EE/ED R&D cooperation and firms’ exploitative/exploratory innovation based on knowledge recombination view. Using a sample of China’s pharmaceutical firms from 2010 to 2022, our findings indicate that firms’ structural shifting from ED to EE R&D cooperation reshapes the structure of innovation in the context of bifurcation. EE R&D cooperation has a greater positive impact on the focal firms’ exploitative innovation compared to exploratory innovation, whereas ED R&D cooperation is more conducive to exploratory than exploitative innovation. Meanwhile, bifurcation positively affects the proportion of EE on the international (EE+ED) R&D cooperation, and the share of firms’ exploitative innovation increases. Moreover, when inter-country political relations are amicable, EE and ED R&D cooperation generates more benefits for the focal firms’ exploitative and exploratory innovation.