Prior work on innovation has generally emphasized the importance of an organization’s exposure to external knowledge. This study, in contrast, redirects our attention toward conditions under which such exposure serves as constraints on organizational endeavors to achieve environmentally preferable innovation. We develop a two-stage model for sustainable innovation. A firm in the first stage explores a variety of alternatives and develops strategic intentions to address broader environmental concerns; thus, it may benefit from access to both diverse sources of external knowledge and network ties that enable an extensive search for new information. In the second stage, a firm exploits limited available options to achieve its strategic intentions. We suggest that dependence on external knowledge in the first stage makes the transition toward the second stage challenging, thereby reducing the probability that a firm’s strategic intentions for sustainability result in actual innovation outcomes. We test our theory using the 2014 Korean Innovation Survey. Our results show that diverse sources of external knowledge through rich network ties, albeit the positive main effects on innovation outcomes, negatively moderate the relationship between a firm’s intentions for environmental sustainability and its achievement of sustainable innovation. Several theoretical and practical implications are discussed.
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