Information Search Processes, Market and Technology Knowledge Dimensions, and Firm Performance

Recent research in marketing has established that market knowledge breadth and depth are important drivers of firms' performance. However, few studies have investigated the antecedents of these important dimensions of market knowledge as well as the moderators of their effects on performance. Drawing on theories of organizational learning and search, the authors argue that different types of market information search processes adopted by firms determine the breadth and depth of their market knowledge. Results show that proximal search – search in the neighborhood of existing knowledge base is positively related to market knowledge breadth and depth, while distal search – search outside the domain of existing knowledge base affects only market knowledge breadth. Also, the authors find that the effect of the two types of search on market knowledge breadth and depth are differently moderated by the degree of cross-functional collaboration. Regarding outcomes, the study confirms the positive effect of market knowledge breadth and market knowledge depth on firm performance. Moreover, the authors show for the first time how the interaction among market and technology knowledge dimensions affects performance. A key finding is that market knowledge breadth is positively moderated by technology knowledge breadth, and market knowledge depth is negatively moderated by technology knowledge breadth. Post-hoc analyses also show how such moderated effects occur across different strategy types (i.e., prospectors, analyzers, defenders). Overall, results from this study offer to scholars and managers a novel and more nuanced insight on market-technology knowledge complementarity and performance.