Innovative Leadership: The Moderating Role of Relational Transparency in the Effect of LMXD on Innovation

Innovative leadership (IL) is widely recognized as a critical antecedent driving team innovation（TI）. However, its underlying mechanism remains insufficiently explored, leaving a critical research gap in leadership and innovation management. To address this gap, this study extends the literature by developing a moderated mediation model grounded in leader-member exchange differentiation (LMXD) and relational transparency (RT). LMXD refers to the variation in leader-member exchange (LMX) quality, while RT reflects team communication openness; both link IL to team innovation, with LMXD as a mediator and RT as a moderator. Based on social exchange theory and organizational justice theory, we argue that IL positively influences TI via LMXD: IL shapes LMX quality, and these differentiated exchanges facilitate TI. In particular, high team RT strengthens the LMXD–TI relationship by mitigating conflicts arising from differentiated exchanges. Data were collected from a sample of 364 employees nested within 96 teams across multiple provinces and cities in China, with coverage spanning the manufacturing, technology, and service sectors. Multi-wave, multi-source results provide strong empirical support for the model. Overall, this research contributes by offering an integrated perspective on "differentiated" mechanisms, bridging the IL-TI gap via LMXD and RT, and extending LMX literature by focusing on differentiation. It also provides theoretical implications for leadership research and actionable recommendations for practitioners to manage diverse teams and enhance innovation.