Recent research indicates that the relationship between state ownership, firm size, and technological innovation outcomes in Chinese firms is a complex and intriguing topic. However, we propose a new perspective based on institutional complexity and examine the combined effects of these two factors. By considering the interplay between the economic efficiency rationale and the institutional logic associated with state ownership and firm size within the context of Chinese firms, we argue that the effects of state ownership and firm size can counterbalance each other. In order to test our hypotheses, we analyze a sample of 385 publicly listed firms spanning the period from 2015 to 2019. The findings reveal that while state ownership and firm size individually exert a negative influence on both exploratory and exploitative innovation in Chinese firms, their interaction actually yields a positive impact. This study contributes to our comprehension of how state ownership influences exploratory and exploitative innovation in the presence of competing institutional logics, as well as the contingent effect of firm size.