This paper investigates the role of search in innovation process. Firm's search behavior is linked to innovative performance, exploring how differences in search activities among firms influence their ability to achieve innovation. We consider firm's search behavior in product development process. A field study of the high technology firms in knowledge-based industries in Korea shows that search strategy plays an important role in developing new products. In this article, the search is defined as the number of search channels that firms rely upon in their innovative activities. Search is an organizational learning process through which firms attempt to solve problems. The product development process is itself a form of problem-solving activity and related search processes involve investments in building and sustaining relations with both other departments inside the firm and external sources such as users, suppliers, and a wide range of different institutions. In explaining the impact of search on innovation, the prior work has focused upon either internal search or external search, thus has not considered the role of both external search and internal search in a single study. Drawing on the knowledge-based view of innovation, we develops the hypotheses which examine the relationship between internal and external search and firm innovation, and the moderating role of absorptive capacity in explaining the relation between external search and innovative performance. The specific hypotheses are as follows; First, internal search is positively associated with innovative performance. Second, external search is curvilinearly related (taking an inverted U-shape) to innovative performance. Third, absorptive capacity moderates the relationship between external search and firm innovation, such that external search is more positively associated with firm innovation when absorptive capacity is high. An empirical research is conducted at high technology firms in knowledge-based industries in Korea. Because the dependent variable (innovative performance) is censored, Tobit model is applied to test the hypotheses. We find strong support for the three hypotheses. The results show that internal search is positively related to innovative performance, and external search is curvilinearly (taking an inverted U-shape) related to innovative performance. Furthermore,the positive relationship between external search and innovative performance is stronger when absorptive capacity is high. The results indicate that firms who search widely across internal and external knowledge sources tend to be more innovative. However, in the case of external search, the benefits of search are subject to decreasing returns, indicating that there is a point where additional search activities become unproductive. It means that external search entails cost. This is attributed to search costs which include information overloads, complexity stemming from combining different knowledge, and the efforts to build and sustain the relationship with external institutions. Contrary to internal search, external search is costly. It suggests that external search efforts need to be organized carefully so that search activities are not dissipated across too many search channels. There can be other factors that may affect the relationship between search behavior and innovation. Firm search behavior is multifaceted and multidimensional construct, so it can be fruitful to conceptualize innovation search along different dimensions. Future research could also explore the antecedents of firm's search strategy to deepen our understanding of new product development process.