Configurations of Ambidextrous Innovation and Its Performance Implication in the Context of Digital Transformation

Abstract

Although previous studies have predominantly dealt with innovation ambidexterity, they have only focused on a single innovation activity and overlooked the interaction of innovation activities. Drawing on organizational ambidexterity theory, this study established four types of innovation configurations: dual exploration (technology exploration and business model exploration), business model leveraging (technology exploration and business model exploitation), technology leveraging (technology exploitation and business model exploration), and dual exploitation (technology exploitation and business model exploitation). Using the panel data of 613 listed manufacturing firms in China, this study examined whether and how configurations of ambidextrous innovation affect firm performance in the context of digital transformation. Empirical results provide evidence that a dual exploration and technology leveraging strategy has a positive impact on firm performance, while a dual exploitation and business model leveraging strategy has the opposite effect and is subject to the moderating influence of the level of digitalization. Under high levels of digitalization, the positive effect of the dual exploration strategy on firm performance becomes more significant, while the effects of others are weakened. This study contributes to the organizational ambidexterity literature by providing a finer-grained understanding of the effect of ambidextrous innovation from a configurational perspective. This study also contributes to the digitalization transformation literature by revealing the moderating role of digitalization.