A tale of two distractions: How institutional forces influence <scp>R&amp;D</scp> ‐based problemistic search in transition economies?

The behavioral theory of the firm (BTOF) suggests that firms are motivated to increase R&D search in response profitability shortfalls—that is, R&D-based problemistic search. Although prior studies have provided considerable evidence for this influential explanation search, recent research shows it is not case transition economies. Our study sheds light on critical question Why economy (TEFs), by identifying institutionally derived mechanisms distract TEF decision makers' attention from Specifically, we examine implications institutional environments goal definition and problem attribution—two yet underexplored components Integrating BTOF implications, theorize how TEFs' distracted government-imposed politically oriented attribution. Using panel data Chinese listed firms, find shortfalls negatively moderated employment (government-imposed definition) lack political connections relative peers (politically attribution). provides novel insights into revealing two distractive (i.e., boundary conditions). Moreover, extends literature exploring intrinsic allocation (among different goals among latent problems) subject extrinsic environments.