Ambidextrous Capabilities and Innovation Performance - The Moderating Effect of Entrepreneurial Orientation

Do the simultaneous pursuit of exploitative and explorative activities will add to or detract from innovation performance? We develop a model of firms as essentially ambidextrous, i.e. as engaging in both exploitative and explorative behavior. According to dynamic capabilities, we find that firms with ambidextrous capabilities - those that both use exploitative capabilities and build explorative capabilities indeed exhibit better innovation performance. Also, the entrepreneurial orientation (EO) has positive moderating effect of on the relationship between capabilities and innovation performance.