The global trend of decoupling, which threatens cross-border interdependencies, has heightened the need for technology independence and self-reliance, particularly among firms from emerging markets. However, it remains uncertain whether this trend will ultimately drive these firms toward substantial R&D investments. A key reason is that such response, may also fail and, in themselves, introduce additional risks to a firm's survival. Drawing on institutional theory and legitimacy literatures, this study argues that firms' willingness to adopt R&D effort to mitigate decoupling risks depends on whether these decoupling trends can trigger institutional changes among the firm's stakeholders. Using a sample of publicly listed high-tech firms in China, this study finds that when decoupling risks are perceived individually, firms tend to adopt more conservative strategies, reducing their R&D investment. However, when decoupling risks are recognized collectively—as in scenarios where risks are revealed across an entire industry—firms tend to take a more aggressive stance on R&D, leading to increased investment. Our study contributes to institutional theory and decoupling research by revealing that the influence of decoupling can be heterogeneous and even contradictory, depending on whether it alters the institutional norms of the stakeholders of firms.
