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Abstract Drawing on institution based view and dynamic capability theory，this study develops and empirically tests a set of hypotheses, aiming at explaining how corporate political activities affect radical innovation outcome, and the role of Legitimacy in influencing the relationship between corporate political action and radical innovation. Data collected form 165 Chinese pharmaceutical firms serve to test the hypotheses. Results highlight that corporate political action increases firm’s strategic flexibility, and then radical innovation outcome. In addition, social legitimacy positively moderates the relationship between political legitimacy and radical innovation, and political legitimacy negatively moderates the relationship between political legitimacy and radical innovation.
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Received: 24 April 2017
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