Is outside-in networking less influential than inside-out R&D on firm performance? Over the past three decades, the inside-out perspective stands at the core of the marketing literature, whereas there is a subconscious bias toward the outside-in perspective. Building on the outside-in and inside-out perspectives of the firm, this study answers the question of whether outside-in networking is indeed less effective than inside-out R&D for enhancing firm performance. The empirical findings based on multiple archival data sources collected on firms operating in China indicate that the effects of networking expenses on firm performance are not weaker than those of R&D expenses. The findings also indicate that the effects of inside-out R&D and outside-in networking expenses are enhanced when firms operate in regions with stronger consumer protection whereas inside-out R&D expenses become less effective in a corrupt environment. •The effects of networking expenses on firm performance are not weaker than those of R&D expenses.•The impacts of inside-out R&D and outside-in networking expenses are enhanced when consumer protection is stronger.•The inside-out R&D expenses become less effective in improving firm performance in a corrupt environment.•This study offers an integrative framework of the inside-out and outside-in views and specifies institutional boundaries.