Abstract
Imitation impacts inter-firm heterogeneity through two pathways - the expropriative effect and the generative effect. While the former makes the imitator more similar to the target, the latter refines innovative practices by recombining them. This work aims to investigate the generative effect of imitation using an NK model and explore how shaping and exploration can disrupt competitors' advantage and provide opportunities for imitators to explore. The findings can help managers develop effective strategies to deal with imitators and policymakers to understand the impact of imitation on competition.