Firms operating in China cultivate managerial ties (business ties and political ties) to be aligned with the distinct local ecosystems in China. Existing research provides inconsistent and even contradictory findings about the effects and importance of different types of managerial ties in relatively developed region of China (e.g., Hong Kong, Beijing, Shanghai, Guangzhou). However, the effects of managerial ties, which were deemed as informal institutions that governing business transactions in transition economies, deeply rooted in situations whereby formal institutions and market supporting system are weak. Since China contains regional disparities in terms of different levels of decentralization, marketization and globalization processes, location-specific institutions are varying significantly across different regions. In this case, the effects of managerial ties may change across different regions in terms of regional disparities. Drawing on the view of dynamic capabilities, this study offers a dynamic view of the roles of managerial ties on firm product innovation. Specifically, this research employs the notion of ecosystem to depict a full picture of the context that firms embedded. Firms' business ecosystem includes the racer of the game (the community of organization, institutions, and individuals) and the ruler of the game (regulatory authorities, standard-setting bodies, the judiciary, and knowledge subsidiaries). The rulers can induce constraints on the rules of the game. In this vein, we use market dynamism to represent the micro level ecosystem (the game per se), and the level of regional development to reflect the macro level ecosystem (different places where the games were embedded). In general, the empirical data collected from 21 provinces out of 31 provinces in mainland China (Eastern and Coastal Region (11 provinces), Middle Region (4 provinces), and Northwestern Region (6 provinces)) reveals that the positive effect of business ties on product innovation is declining while the positive effect of political ties is increasing. In addition, the impacts of business ties and political ties on product innovation vary across different regions and different degrees of market dynamism. Specifically, when considering the influence of the macro-level ecosystem, the positive contribution of business ties on product innovation is declining in the developed region but increasing in the under-developed region when business ties are getting stronger. On the contrary, the positive effect of political ties in the developed region is increasing while declining in the under-developed region. With respects to the micro-level ecosystem, when market dynamism is high, the declining rate of the positive effect of business ties on product innovation will become greater while the increasing rate of the positive effect of political ties will be greater. Moreover, the interaction between business ties and political ties has significant influence on product innovation when firms operating in the highly dynamic market. This research provides implications for the dynamic capabilities research, social network theory, and offers fresh insights of the co-evolution between managerial ties, product innovation, and ecosystems. References are available on request. [ABSTRACT FROM AUTHOR]