Searching in the regulatory environment: The impact of regulatory search on firm innovativeness

This article examines the effect of regulatory search on firm innovativeness using survey data from Chief Executive Officers (CEOs) of Australian listed and private firms. We used a self-developed scale to measure regulatory search, which consists of both reactive and proactive regulatory search. The results show that only reactive regulatory search exhibits a positive and direct association with firm innovativeness. However, the results suggest that slack moderates the relations between the two regulatory search factors and innovativeness in different ways. Specifically, under a high (low) slack environment, reactive regulatory search is negatively (positively) related to innovativeness, while, under a high (low) slack environment, proactive regulatory search is positively (negatively) related to innovativeness.