R & D investment management and ambidextrous technological innovation: Evidence from Chinese listed firms

Firm-level technological innovation is in part driven by R & D management motivation. This paper studies the effect of Chinese listed firms' R & D investment management on their ambidextrous technological innovation performance. In the prospective of internal financial constraints and earnings management, three R & D motivations are identified: strategically proactive intervention, resource-constrained passive adjustment, and R & D manipulation for earnings purposes. Based on the Chinese listed firm level data during 2007-2019, this paper analyzes the effects of these three different R & D management motivations on the ambidextrous innovation patent portfolio, cuttingedge innovation possibility and patent diversification. The empirical results reveal that R & D management significantly promotes ambidextrous innovation, particularly exploration innovation. Firms with more internal financial resources are more likely to engage in proactive R & D activities than those with less financial resources who are more likely to place earnings before R & D investment as the top priority. A robustness test that controls for the 2008 financial crisis also verifies our results.

Automated summary

This paper examines the impact of R&D investment management on ambidextrous technological innovation performance of Chinese listed firms, finding that R&D management significantly promotes ambidextrous innovation, especially exploration innovation. Firms with more financial resources are more likely to engage in proactive R&D activities, while those with less financial resources prioritize earnings over R&D investment.