Searching Beyond the Core The Cost Consequences of Technological Search in the FMCG Industry

Abstract

This study examines how non-core technological search and R&D intensity are associated with short-term operational efficiency in the fast-moving consumer goods (FMCG) sector. Building on organizational learning theory, the attention-based view, and technological search research, the study proposes that non-core technological search has an inverted U-shaped relationship with operational efficiency, while R&D intensity is negatively associated with short-term operational efficiency. Moderate non-core search may generate recombination benefits, whereas high non-core search may increase coordination, integration, and attention costs. These predictions are tested using a longitudinal panel of 5,257 firm-year observations from 602 publicly listed FMCG-related manufacturing firms between 2000 and 2024. Fixed-effects regression models do not support the predicted inverted U-shaped relationship for non-core technological search. However, R&D intensity is negatively related to operational efficiency in the main R&D and full models, supporting the expectation that innovation-related investment puts pressure on short-term operating margins. These findings suggest that, in this sample, the operational cost consequences of technological search are not directly visible in short-term operating margins. The study contributes to the technological search literature by shifting attention from innovation outcomes to short-term operational efficiency and by distinguishing the direction of technological search from the intensity of innovation investment.