Abstract: Abstract:Product modularity has been paid more attention by academic field and corporations in recent years,but how product modularity influence organizational performance is still not clear in theory. Through theoretical induction,we test the hypothesis using Chinese firm data and try to explore the different mechanism of influence from product modularity on organizational performance. The conclusion inferred that product modularity can influence short-term performance directly and through the mediating role of threshold capability and critical capability indirectly. On the other hand,product modularity would increase the level of technological innovation which improved corporate competitive capability and long-term performance. The creative point in the paper is that we integrate the previous model and explore the different mechanism of product modularity on short-term and growth performance. Finally,we talked about the implication for the managerial practice and future research.

Key words: product modularity, technological innovation, core capability, organization performance