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Employees’ knowledge management, which influences creativity, is a pivotal resource in organizational innovation activities, as it helps activate the knowledge resource pool and improves knowledge flow. Using social information processing theory, this study aims to construct a cross-level model to examine how knowledge hiding plays a role in the relationship between leader–member exchange differentiation (LMXD) and employee creativity.

This study surveyed 754 leader–employee matching samples from 127 teams in China innovation enterprises at two time points. Confirmatory factor analysis, convergent analysis, hierarchical regression analysis and bootstrapping method by SPSS and AMOS were used to test the hypotheses.

The empirical results demonstrate the cross-level model’s efficiency and reveal the following findings: Team-level LMXD is negatively related to employee creativity, whereas it is positively related to knowledge hiding; knowledge hiding is negatively associated with employee creativity; thus, knowledge hiding plays a mediating role in the relationships between them.

Based on the knowledge-hiding perspective, this study analyzed an underlying mechanism between LMXD and employee creativity, thereby further enriching the literature on the influence of knowledge management. This proposed connection has not been established previously. Moreover, the findings respond to the reasons for the inconsistent conclusions of previous literature on the cross-level relationship between LMXD and employee creativity based on the social information processing theory. It thus clarifies the cross-level influence path, as well as provides a theoretical basis for further research on the relationship between the two.