Institutional systems exert important influences on firms' development of innovative capabilities. This article examines studies of firms' innovative competencies within the comparative capitalisms (CC) literature. This research provides theoretically sophisticated assessments of firms' innovative capabilities in different countries. It takes into consideration a range of institutional areas, such as corporate governance and labour market regimes. However, CC studies differ significantly along three key analytical dimensions. First, some studies focus more extensively on firms and firms' objectives than others. Second, research examines institutions at the macro, meso and micro levels to varying degrees. Finally, studies adopt different assumptions on the variability and dynamism of a firm's institutional setting; such variability can include the importance of foreign institutional resources to firms' innovative capabilities. Future CC research should pay greater attention to theorizing firms' innovation-related requirements and detailing their specific institutional settings, including their access to domestic and foreign institutional resources. Concepts and insights from the wider innovation and international business literatures can help achieve these objectives. By drawing on these related fields, CC studies of innovative capabilities will be able to assess in theoretically robust ways the challenges that internationalization and what this article calls ‘institutional outsourcing’ pose for analysts and firms.