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Exploitation or Exploration? Managerial Myopia, Economic Policy Uncertainty and Ambidextrous Innovation Investment

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  • Tingyu Yang

    (School of Economics and Management, Beijing Jiaotong University, Beijing 100044, China)

  • Yongmei Cui

    (School of Economics and Management, Beijing Jiaotong University, Beijing 100044, China)

  • Rui Li

    (School of Economics and Management, East China Jiaotong University, Nanchang 330013, China)

Abstract

In today’s increasingly competitive international environment, original technology innovation has become essential for enhancing enterprises’ sustainability. As key innovation needs constant exploration rather than growing leaps and bounds, it is often ignored by managers who focus on short-term performance. Taking the data of publicly listed Chinese companies from 2010 to 2020 as a sample, this paper put forward the relation between managerial myopia and ambidextrous innovation investment on the basis of a empirical approach combining machine learning technology. Results revealed that managerial myopia has different effects on the ambidextrous innovation investment of enterprises. Specifically, the study finds a significant negative association between managerial myopia and exploratory innovation investment, while there is no significant relationship with regard to exploitative innovation investment. Further study showed that the negative influence is weakened by economic policy uncertainty and stronger in companies with more severe agency problems. By shedding light on the way that managerial myopia affects enterprises’ ambidextrous innovation investment, this research contributes to the literature on the impact of managerial myopia, offering key insights into how to cultivate the core competitiveness of enterprises and ensure their sustainable development.

Suggested Citation

  • Tingyu Yang & Yongmei Cui & Rui Li, 2023. "Exploitation or Exploration? Managerial Myopia, Economic Policy Uncertainty and Ambidextrous Innovation Investment," Sustainability, MDPI, vol. 15(9), pages 1-20, April.
    • Handle: RePEc:gam:jsusta:v:15:y:2023:i:9:p:7173-:d:1132510
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    2. Xiaoming Peng & Yihao Li & Chengxin Guo & Liang Peng & Sijin Tan, 2023. "“Risk” or “Opportunity”? The High Sensitivity of Corporate Green Innovation to Environmental Policy Uncertainty: Evidence from China," Sustainability, MDPI, vol. 15(11), pages 1-18, June.

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