State ownership, CEO’s political experience and ambidextrous innovation: empirical evidence from China

Purpose To address the different standpoints of the impact of state ownership on firms’ innovation in prior studies, this study aims to propose a contingency-agency model and theorize that state ownership may promote exploitative innovation and hinder exploratory innovation due to agency duty and evaluate the moderating effect of CEO’s political experience drawing upon imprinting theory. Design/methodology/approach Using a panel data set of 579 Chinese firms from 2012 to 2021, this paper uses fixed-effect Poisson models and negative binomial regression models for robustness checks to study the differential impact of state ownership, CEO’s political experience and industry monopoly on ambidextrous innovation. Findings In Chinese manufacturing firms, state ownership is positively related to exploitative innovation and negatively related to exploratory innovation. Moreover, if the focal firm has a CEO who served as a national-level politician, the negative effect of state ownership on exploration will be weakened, and if the focal firm has a CEO who has served as a municipal- or county-level politician, the positive effect of state ownership on exploitation will be strengthened. The monopoly degree of the firm’s industry works can moderate the moderation effect of CEO’s political experience level. Originality/value This paper provides the following insights: despite the priority of indigenous innovation by the government, managers in state-owned enterprises may focus on exploitation to fulfill the metrics assessment and overlook exploration which could benefit the firm more in the long term. Besides, this paper also contributes to imprinting theory by offering evidence that the different position levels of CEO’s political experience can imprint on a varying state-oriented ideology.