While scholars have widely examined the effect of knowledge base (i.e. knowledge breadth (KB) and knowledge depth (KD)) on innovation performance, the relationship between KB/KD and incremental innovations remains not clear. This article examines how existing knowledge base interacts with external and internal knowledge heterogeneity (KH) to affect incremental innovation in small and medium enterprises (SMEs). A collection of 230 samples from high-technology SMEs in China demonstrate that the effects of KB and KD are contingent on external and internal KH in opposite ways. The study proposes that a firm with a broad knowledge base is better able to develop incremental innovations matched with internal KH rather than external KH; firms with high depth of knowledge benefit more from external KH than internal KH for fostering its incremental innovations.

This article investigates the impact of pollution blacklisting on firm green innovation (GI) by a unique information disclosure project from 782 Chinese listed firms in heavily polluting industries during 2015-2019. Our research found that pollution blacklisting establishes a poor environmental perception and puts firms under greater legitimacy pressure than their peers, forcing them to go beyond compliance through more substantial long-term solutions like GI to reestablish environmental legitimacy and win social support again. For firms with high levels of media coverage, the positive effect of pollution blacklisting on GI is strengthened, while for firms with bureaucratic political connections, the positive effect is weakened. The findings have important theoretical and practical implications for GI management and relevant information disclosure practice.

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