• behavioral theory of the firm;
  • corporate governance;
  • ownership structure;
  • Japan;
  • varieties of capitalism

We propose that the behavioral theory of the firm perspective on R&D search requires modification when applied to “communitarian” cultures such as Japan because reciprocity and embeddedness can influence the search decision. When performance exceeds aspirations, communitarian-oriented firms are more inclined to use their privileged position to help their less fortunate stakeholders by engaging in additional R&D search that should yield greater payoffs for these stakeholders in the future. Our results indicate that while Japanese firms engage in “problemistic” search in a manner similar to what has been found in other contexts, they respond differently when performance exceeds expectations. We find that as performance rises above aspirations, communitarian-oriented firms raise R&D search to a greater extent than do firms that lack a communitarian orientation. Copyright © 2013 John Wiley & Sons, Ltd.