Abstract: Drawing upon the institution-based view, considering China’s institutional characteristics during economic transition period, the paper begins by discussing and empirically examining the impact of corporate political activities on radical innovation. Corporate political activities (CPAs), as one of the effective nonmarket strategies, provides firms with alternative strategic options to overcome resource constraints and weak protections arising from incomplete institutional framework. Although the relationship of CPAs and radical innovation has already been studied by some researchers, there still exists some research gaps. On one hand, extant studies have argued that firms usually simultaneously conduct market and nonmarket strategies, the performance of nonmarket can be easily influenced by market strategies. There is a lack of research on whether the effect of CPAs on radical innovation is influenced by market strategies and on how CPAs and firms’ market strategies jointly affect the achievement of radical innovation. On the other hand, the institution-based view demonstrates that although firms can rely on CPAs to improve radical innovation, this informal approach is subject to the impact of external formal institutional environment. The extant research is also lacking in examining the effects of different types of formal institutional environment on the relationship between CPAs and radical innovation. Using the survey data from 227 companies in biopharmaceutical industry, first, the empirical findings indicate that CPAs significantly facilitate radical innovation. Second, we decide to draw on Miles and Snow typology (prospector, analyzer and defender) in this study because we believe it can provide a comprehensive and robust logic framework that suits our research needs: (1) the Miles and Snow typology provides significant implications for both managers and scholars since it continuously to be the most employed, enduring, and robust typologies available. (2) Miles and Snow’s strategic core fits our study focus of radical innovation. They argue that technologies play the key role in formulating market strategies. When it regards to radial innovation, because relatively high level of strategic proactiveness is prerequisite for radical innovation, we decide to only focus on prospector and analyzer strategies while leaving out defender strategy in this study. Since defenders show more willingness in maintaining strategic stability, the external contexts they embedded are relatively steady. Under this circumstance, conducting radical innovation has not been one of their primary concerns. The results show that different types of market strategies exert asymmetric effects on the efficacy of CPAs on radical innovation. Prospector strategy significantly strengthens the relationship between corporate political activities and radical innovation, whereas analyzer strategy significantly weakens this relationship. Finally, in terms of formal institutional environment, we incorporate the degree of policy change and marketization as moderators, which represents the characteristics of economic transition. The results exhibit that both the degree of policy change and the degree of marketization exert negative effects on the relationship between CPAs and radical innovation. The paper not only provides some relevant theoretical and managerial implications for companies regarding the interaction with governments when engaging in radical innovation projects, but also benefits government for encouraging radical innovations with some policy implications.