Using innovation survey data on a sample of UK manufacturing firms, Laursen and Salter (2006) documented a non-monotonous relationship between external search strategies and firm-level innovative performance. Egbetokun, Oluwatope, Adedeye, and Sanni (2015) find partially similar results in a combined sample of Nigerian manufacturing and service firms. A major discrepancy is that external search appears not to matter for radical innovation in our sample. Based on multiple research streams including economics of innovation and development economics, the authors develop and test new hypotheses on sectoral differences and the role of the economic context. They find that in a developing context, a wider range of innovation obstacles implies broader external search and more intense obstacles require deeper search. They explore the implications of these results for management research and theory.