Shareholder heterogeneity, board dicisionmaking process and ambidextrous corporate innovation: evidence from China

Purpose - Shareholder heterogeneity reflects the interactive relationship between shareholder groups of different industries and ownership types. This paper aims to discuss the impact of shareholder heterogeneity on ambidextrous corporate innovation. Design/methodology/approach - Combining questionnaire and database data, this study empirically analyzes the internal mechanisms of the impact of shareholder heterogeneity on ambidextrous corporate innovation. Findings - The authors find that shareholder heterogeneity can promote ambidextrous corporate innovation and that board’s decision-making processes play an intermediary role. Specifically, shareholder industry-type heterogeneity promotes ambidextrous corporate innovation by improving procedural rationality in board’s decision-making process, and shareholder ownership-type heterogeneity promotes ambidextrous corporate innovation by improving political behavior in board’s decision-making process. The analysis of the impact degree shows that shareholder industry-type heterogeneity has a greater impact on exploitation innovation, while shareholder ownership-type heterogeneity has a greater impact on exploratory innovation. In addition, the research also shows that shareholder groups dominated by industry-type heterogeneity have an impact on corporate innovation by shaping an engaged board with higher procedural rationality and lower political behavior. Shareholder groups dominated by ownership-type heterogeneity have an impact on corporate innovation by shaping a contested board with higher political behavior and lower procedural rationality. Originality/value - This study not only enriches the research on shareholder heterogeneity and corporate innovation in the context of transformation but also provides an analytical framework for research on board’s decision-making process.