This study provides an institutional framework to interpret firms` resource management in China. We identify the formal and informal institutional capital that firms acquire via their relational network and solicit from the government, and their distinctive effects on firms` radical innovation. We address how firms` utilization of the formal and informal institutional capital would be influenced by their multi-level contexts (local context, market context, and organizational context). Using a survey data from 280 Chinese high-technology firms, we find that firms` informal institutional capital has a higher positive effect on firms` radical innovation than the formal institutional capital does. The effects of firms` formal institutional capital on radical innovation would be higher in the complex market, and for the state owned enterprises, whereas the effect of firms` informal institutional capital on radical innovation would be higher in the developed provinces but lower in the complex market.