Ambidexterity and firm performance: The moderating effects of normative and cognitive institutions

Abstract

Firms try to follow the best strategy to reach their competitive advantage. Combining exploration and exploitation in an innovation ambidexterity strategy can be an alternative to improve firm performance. Thus, using survey data from the sample of the 2018 GUESSS project, this study assessed the effect of innovation ambidexterity on firm performance and the moderator effects of normative and cognitive institutions. Our findings suggest a positive effect of ambidexterity on firm performance, which is positively moderated by normative and cognitive institutions in low- and middle-income countries, and only by cognitive institutions in high-income countries, being the moderator effect stronger for higher levels of ambidexterity.