Impact of top managers’ short-term orientation on the leap between exploration and exploitation: evidence from China

Purpose Based on punctuated equilibrium theory and time orientation theory, we investigated the decision-making tendency and regularity of top managers’ short-term orientation regarding the leap between exploration and exploitation under uncertain situations. Design/methodology/approach This study conducted an empirical analysis based on a sample of 547 A-share listed companies in Shanghai and Shenzhen Stock Exchanges from 2010 to 2018, utilizing fixed effects models. Findings The results show that top managers’ short-term orientation is negatively related to the leap between exploration and exploitation. Economic policy uncertainty plays a positive moderating role between the two. Further heterogeneity analysis shows that in high-tech industries and enterprises with high financing constraints, the positive moderating effect of economic policy uncertainty on the relationship between top managers’ short-term orientation and the leap between exploration and exploitation is more pronounced. Practical implications This study has important implications for optimizing the selection of top managers and the formulation of government economic policies in a rapidly changing business environment. Originality/value This study introduces the personality trait of short-term orientation, which deserves special attention, into research on the leap between exploration and exploitation, enriching the relevant research on top managers’ decision-making tendencies in the context of economic policy uncertainty and expanding the application scenarios of time orientation theory and punctuated equilibrium theory.