Economic policy uncertainty and enterprise ambidextrous innovation: Exploration or exploitation?

Estimating the impact of economic policy uncertainty (EPU) on enterprise ambidextrous innovation can provide insight into firms' current innovation choice orientation, but few studies systematically reveal the relationship between the two. We have developed a new investment valuation construct that includes three parts: the direct net present value, growth option value, and strategic preemption value. Based on this, we systematically expound the relationship between EPU and enterprise ambidextrous innovation and explore the moderating effect of government subsidies and managerial ownership. Using the patent text mining data of Chinese A-share listed companies in Shanghai and Shenzhen from 2010 to 2019 and exploiting the world average temperature as an instrument for EPU, we find that EPU promotes enterprise's exploitative innovation and inhibits enterprise's exploratory innovation through the redistribution of R&D investment in ambidextrous innovation. Government subsidies negatively moderate the relationship between EPU and enterprise exploitative innovation, but have no moderating effect on the relationship between EPU and enterprise exploratory innovation. While managerial ownership positively moderates the relationship between EPU and enterprise exploitative innovation, no evidence of a moderating effect was found in the relationship between EPU and enterprise exploratory innovation. [ABSTRACT FROM AUTHOR]