Abstract Based on institutional theory and resource based view (RBV), the study first explores the mediating role of strategic flexibility and the moderating role of technological capability in the relationship between institutional support and firm performance. We investigate 600 executives from 300 companies located in more than 10 cities of Guangdong province, involving Guangzhou, Shenzhen, Zhujiang, Dongguan and Foshan etc. Finally, with 186 valid samples, we find that institutional support has significant impact on firm performance and strategic flexibility plays the fully mediating role in this relationship. Furthermore, technological capability significantly moderates the relationship between institutional support and strategic flexibility. The study shows that we can better explain how institutional support affects firm performance by taking strategic flexibility and technological capability into consideration, and our empirical results provide important implications for the development and application of institutional theory in gaining the competitive advantage.
2014, Vol. 11 
