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International ambidexterity in firms’ innovation of multinational

enterprises from emerging economies: an investigation of

TMT attributes Hang Wu

East China University of Political Science and Law, Shanghai, China, and

Jin Chen Tsinghua University, Beijing, China

Abstract

Purpose – Extant research has integrated ambidexterity perspective into international business studies and calls for emerging market multinational enterprises (EM MNEs) to implement exploration and exploitation activities simultaneously in foreign markets. However, less attention has been paid to empirically test whether and how international ambidexterity can benefit the innovation performance of EM MNEs. Based on the data of international manufacturing firms in China, this paper explores the relationship between international ambidexterity and innovation performance and investigates four contingency factors of top management team (TMT): two external resource accumulation elements (i.e. TMT business ties and TMT political ties) and two internal resource integration elements (i.e. TMT contingency rewards and TMT social integration). Design/methodology/approach – The author conducts multiple hierarchical linear regression analysis to test the hypothesis by collecting survey data from 227 MNEs from several Economic Development Zones located in Zhejiang province in China. Findings – The results show that international ambidexterity is positively related to innovation performance, and the international ambidexterity–innovation performance relationship is amplified when TMTs build strong ties with external business partners and political departments, when EM MNEs link top managers’ income to team collective performance and create a highly social integrated TMT. Originality/value – The results contributes to answer the question that how well EM MNEs will succeed and enrich the context specificity of international ambidexterity. The findings also help us better understand the inconsistent empirical findings in organizational ambidexterity by uncovering the contingency role of several TMT attributes.

Keywords International ambidexterity, Exploratory internationalization, Exploitative internationalization,

EM MNEs, TMT

Paper type Research paper

1. Introduction In view of the tremendous global integration speed of emerging market multinational enterprises (EM MNEs) and the strategic significance of internationalization to EM MNEs’ innovation and catch-up (Wu et al., 2017; Dong et al., 2019), researchers have paid great attention to explaining the distinct motivation and antecedents of EM MNEs and testing the performance implication of different entry modes (Luo and Zhang, 2016; Li et al., 2017), but ignored to uncover how well companies will succeed when investing and operating overseas (Luo and Rui, 2009). Existing theoretical perspectives on EM MNEs’ international operations have undergone a transformation from exploration, exploitation to ambidexterity. Some

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The authors are indebted to Dr. Umans, Prof. Ruta Kazlauskaite and anonymous reviewers for their many constructive insights and suggestions. The research was supported by the National Natural Science Foundation of China (71972075, 71702057).

The current issue and full text archive of this journal is available on Emerald Insight at:

https://www.emerald.com/insight/1746-5265.htm

Received 24 July 2019 Revised 12 December 2019

3 March 2020 Accepted 3 March 2020

Baltic Journal of Management Vol. 15 No. 3, 2020

pp. 431-451 © Emerald Publishing Limited

1746-5265 DOI 10.1108/BJM-07-2019-0267

researchers have highlighted that EM MNEs should become ambidextrous and conduct exploratory and exploitative activities simultaneously in foreign markets to assure both short-term survival and longer-term growth (Luo and Rui, 2009; Prange and Verdier, 2011; Bandeira-de-Mello et al., 2016).

Despite the intuitive appeal of ambidexterity to EM MNEs, less attention has been paid to empirically test the performance effect and contextual conditions of international ambidexterity. Since Luo and Rui (2009) extend ambidexterity perspective into the foreign operation of EM MNEs, a few scholars have started to investigate the capability attribute, performance implication and implementation process of international ambidexterity. Prange and Verdier (2011) argue that international ambidexterity is a third-order dynamic capability, which in turn increases internationalization performance. Hsu et al. (2013) firstly conduct an empirical test about the impact of international ambidexterity on financial performance using balancedpanel dataof 207 Taiwanese firms. Bandeira-de-Mello et al. (2016) use a singleprocess- based case study in a Brazilian multinational to explore how ambidexterity implementation process actually happens. Ina word, existing researchers havejustconductedan initial study to integrate ambidexterity perspective with international business research to answer the question of “how EM MNEs can succeed”; future research calls for more empirical work to explain how international ambidexterity acts on EM MNEs’ performance.

Moreover, it is noteworthy that although ambidexterity research in such fields as organizational learning (March, 1991), innovation (Jansen et al., 2006) and knowledge search (Katila and Ahuja, 2002) inspires us and has empirically investigated the performance effect of various kinds of ambidexterity, the ambidexterity–performance relationship remains unclear. Some researchers find that organizational ambidexterity directly improves firm performance (Gibson and Birkinshaw, 2004; He and Wong, 2004), while others show a contingent effect (Lin et al., 2007), negative effect (Atuahene-Gima, 2005) and even no support for the ambidexterity hypothesis (De et al., 2014). These conflicting empirical results indicate that the path from ambidexterity to firm performance is not straightforward but paved with implementation challenges, and ambidextrous firms should be capable of providing enough resources for and promoting the resource integration of both exploration and exploitation departments (Clercq et al., 2013, 2014). Therefore, it is vital to consider what contingencies enable firms to convert ambidexterity into improved performance.

In response, the purpose of this study is to empirically examine the impact of international ambidexterity on innovation performance and reveal the boundary conditions under which such ambidextrous strategy for EM MNEs works. The reason why we focus on the innovation performance consequence is that researchers in the fields of strategy and international business have argued that internationalization has been conducted as a vehicle for EM MNEs to broaden their knowledge base (Wu et al., 2016, 2017) and to achieve innovation catch-up with their competitors in developed countries (Hitt et al., 1997; Bauer et al., 2016). A lot of empirical studies have empirically tested such various measures of internationalization as foreign direct investment, exporting and international diversification on firm’s innovation (Hitt et al., 1997; Salomon and Shaver, 2005; Bauer et al., 2016; Wu et al., 2016, 2017). In this paper, we propose that implementing international ambidexterity can avoid the drawbacks of overemphasizing each strategy, which in turn improves innovation performance.

In view of the strategic significance of top management team (TMT) played in external resource accumulation (Park and Luo, 2001; Collins and Clark, 2003) and internal resource integration (Jansen et al., 2009; Umans et al., 2018), we will investigate the moderating impact of TMT on the relationship between international ambidexterity and innovation performance. TMT is a team composed of senior managers who make strategic decisions and are responsible for the organization and coordination of the entire enterprise (Asghar et al., 2018). For lacking of such facilitating mechanism as resource search mechanism and hierarchical administrative systems, EM MNEs’ TMT must represent an important locus for

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accumulating critical resources and resolving integration tensions in achieving organizational ambidexterity (Wang et al., 2015; Li and Huang, 2019). In this study, we use the ties with external business partners and ties with government departments to reflect TMT’s resource accumulation mechanism. We expect that both TMT’s business and political ties may provide EM MNEs with a lot of resources, which may enhance the positive relationship between international ambidexterity and innovation performance. Except that, we use contingency rewards and social integration to reflect TMT’s resource integration mechanism. We also argue that the impact of international ambidexterity on innovation performance will be positively moderated by TMT contingency rewards and TMT social integration. The reason is that when EM MNEs link top managers’ income to team collective performance and create a highly social integrated TMT, it is likely more beneficial for facilitating mutual negotiation and combining strategic contradictions, which in turn enhances the innovation performance of international ambidexterity. Figure 1 presents our theoretical model.

2. Theory and hypotheses 2.1 Organizational ambidexterity Organizational ambidexterity is defined as the ability of firms to pursue and synchronize disparate exploration and exploitation simultaneously (He and Wong, 2004). Exploration is related to search, experimentation and variance increase, whereas exploitation is associated with activities such as refinement, efficiency, selection and implementation (March, 1991). Overemphasizing exploitation and neglecting exploration will be subject to core rigidities and powerful path dependencies, finally leading to the risk of obsolescence. Similarly, paying excessive attention to exploration against exploitation will provide firms with a large amount of differentiated innovation information, which will lead to overload of information processing and reduction of innovation efficiency. At the same time, excessive exploratory activities make it difficult for firms to recover search costs and ultimately lead to innovation failure. In comparison, balance and coordination of exploration and exploitation enable firms to avoid the risk of overemphasis on one aspect over the other and more critically achieve the complementary integration effect (Gibson and Birkinshaw, 2004; Cao et al., 2009).

2.2 Ambidexterity perspective of EM MNEs’ internationalization Inspired by organizational ambidexterity research, which highlights the importance of pursuing disparate goals concurrently for firms’ survival, international business scholars insist that MNEs can not only exploit existing advantages overseas to bolster short-term survival but also explore and capture resources in overseas markets to compensate competitive disadvantages for long-term growth (Chen and Chen, 1998; Makino et al., 2002). This is significantly different from the traditional international business theories proposed based on MNEs in developed countries, which view internationalization as the exploitation of

TMT contingency

rewards

International

ambidexterity

Innovation

performance

TMT business

ties

TMT political

ties

TMT social

integration

Resource accumulation Resource integration

H1

H2 H3 H4 H5

Figure 1. Conceptual model

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MNEs’ ownership advantage in foreign markets (Caves, 1971), and is especially true for EM MNEs that face an unprecedented competitive environment and want urgently to compete more effectively against global rivals. Luo and Rui (2009) first introduce an ambidexterity perspective into the international expansion of EM MNEs, emphasize EM MNEs’ need to build and leverage ambidexterity to offset late-mover disadvantages and specifically answer the question “why ambidexterity is unique to EM MNEs.” After that, several researchers have called for ambidextrous strategic action of EM MNEs in international markets (Prange and Verdier, 2011; Hsu et al., 2013; Bandeira-de-Mello et al., 2016).

According to existing literature, this study divides EM MNEs’ internationalization into two types, including exploration and exploitation. Exploratory internationalization is regarded as a compensatory response to search or acquire strategic assets in foreign countries to secure new capabilities (Makino et al., 2002; Luo and Tung, 2007; Rui and Yip, 2008), associated with broad and distant learning activity beyond the current knowledge area of the firm, which leads to greater experimentation and radical innovation (Katila and Ahuja, 2002). In contrast, exploitative internationalization is viewed as the transfer of such ownership-specific advantages as cost-effective mass production capabilities across borders to bolster short-term profitability (Makino et al., 2002; Peng, 2012), accompanied by local and deep learning activity within a well-defined and limited knowledge space related to the firm’s previous experience, which ensures efficiency and incremental innovation (Katila and Ahuja, 2002). International ambidexterity means the simultaneous pursuit of exploratory and exploitative internationalization to achieve complementary effects (Prange and Verdier, 2011; Hsu et al., 2013).

2.3 Impact of international ambidexterity on innovation performance Innovation performance refers to the innovation outputs reflected in new product development and patenting frequency (Chen et al., 2011; Wu et al., 2016). There are two distinct mechanisms by which international ambidexterity contributes to better innovation performance. The first is that exploratory internationalization can avoid the competence trap caused by exploitative internationalization. Although exploitative internationalization can bring short-term cash income and increased innovation efficiency, excessive emphasis on exploitative internationalization can lead to the core rigidity and competence trap (Levitt and March, 1988), which lead EM MNEs to gradually lose its environmental responsiveness and hinder the further improvement of innovation performance. Exploratory internationalization can help EM MNEs avoid short-sightedness caused by exploitative internationalization (Hsu et al., 2013). Exploratory internationalization will bring a large amount of differentiated information, which can greatly promote the integration of existing knowledge and new knowledge and thus significantly enhance the ability of enterprises to innovate.

The second is related to the fact that exploitative internationalization reduces the uncertainty of exploratory internationalization. Although EM MNEs can acquire the latest technology and understand innovation development trend through extensive exploration overseas, the knowledge stemming from a high degree of exploratory effort is always novel, distant and accompanied by unsure international partners, which may not yield the desired outcome (Katila and Ahuja, 2002; Wu and Wu, 2014). Active exploitative internationalization can help alleviate these problems by rapidly internalizing the knowledge explored overseas. Through the reuse of existing knowledge, managers can better understand the distribution and functionality of internal knowledge and thus be able to integrate existing knowledge to discover and integrate new innovation opportunities. Except that, a thorough understanding of the foreign context developed through extensive exploitative internationalization can help EM MNEs refine any technologies discovered and adapt them to address foreign market needs, leading to successful new products that appeal to foreign customers. Based on these ideas, we propose the following hypothesis.

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H1. International ambidexterity is positively related to innovation performance

2.4 TMT of EM MNEs: accumulating and integrating resources in implementing international ambidexterity We have just proposed that international ambidexterity of EM MNCs can facilitate innovation by avoiding the competence trap of exploitative internationalization and reducing the uncertainty of exploratory internationalization. However, what is worth mentioning is that international ambidextrous firms are inherently unstable because of the higher resource requirements imposed upon EM MNCs to synchronously implement exploratory and exploitative activities (Cao et al., 2009) and lack of internal consistency, which restricts the resource exchange and combination process (Clercq et al., 2014). Therefore, the international ambidexterity–innovation performance assumption is built on the premise that resources are abundantly available (O’Reilly and Tushman, 2004) and can be effectively exchanged and integrated so as to appropriate the potential value embedded in spatially separated activities (Jansen et al., 2009). This logic suggests that the innovation performance effect of international ambidexterity will depend on the capability of EM MNCs to accumulate and provide enough resources for and to facilitate the integration during the ambidextrous implementation process. When EM MNEs are more capable of accumulating resources and contributing to the integration process, the positive relationship discussed earlier becomes stronger.

As the principal decision-making unit of EM MNCs, TMTs play an important role in establishing external links for resource accumulation (Park and Luo, 2001; Collins and Clark, 2003) and promoting internal coordination to support decision-makings regarding resource integration processes (Jansen et al., 2009; Umans et al., 2018), which are crucial for EM MNCs to balance exploration and exploitation. As a complement of formal institutional framework, external network ties act as a vital channel in providing rich source of resources for firm’s foreign operation (Mesquita and Lazzarini, 2008). In our research, we focus on the external ties of TMT members because they are in a particularly favorable position to gather, sift and collate timely and relevant knowledge and information that enables EM MNEs to conduct exploratory and exploitative internationalization concurrently (Collins and Clark, 2003). Except that, TMTs in international ambidextrous organizations typically face role conflicts that may diminish acceptance of decisions, so TMTs are responsible for coordinating and translating contradictory expectations across differentiated exploratory and exploitative units into workable strategies (Jansen et al., 2008), which is crucial to get integrative and synergetic value from exploratory and exploitative internationalization. In this section, we examine the moderating role of two TMT resource accumulation mechanisms that are considered to be good for providing resource support: TMT business ties and TMT political ties, and two TMT resource integration mechanisms that are deemed to be beneficial for combining strategic contradictions: TMT contingency rewards and TMT social integration.

2.3.1 The moderating effect of TMTs’ resource accumulation.

(1) TMT business ties

TMT business ties refer to the sets of relationships TMT members have with outside business partners, such as customers, suppliers and competitors, who own resources of potential value to the firm (Park and Luo, 2001; Peng and Luo, 2000; Collins and Clark, 2003). Previous studies on EM MNEs have emphasized the importance of TMT business ties in firms’ international success (Elango and Pattnaik, 2007; Filatotchev et al., 2009), claiming that TMT business ties can act as a flexible resource supplement in an environment where factor mobility is severely constrained (Luo, 2003). In our study, we argue that TMT business ties can provide EM MNEs with enough resources to implement international ambidexterity.

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Establishing good relationship with upstream supplier can bring higher inventory turnover and timely delivery to EM MNEs, which greatly enhance manufacturing productivity, lower production cost and finally promote international exploitation activities (Mesquita and Lazzarini, 2008). Through cooperating with peer competitors closely, firms can understand the latest developments in the industry by information sharing and intelligence reconnaissance, significantly enhancing the ability of EM MNEs to explore and acquire high-end knowledge overseas. Except that, TMTs with a strong customer focus may both develop attractive products through listening to the voices of customers repeatedly and improve their technical capabilities in order to design and produce the final products, in favor of the exploratory and exploitative internationalization simultaneously. Therefore, TMT business ties provide resource guarantee for EM MNEs to implement and gain innovation benefits from international ambidexterity. Based on these arguments, we propose the following hypothesis:

H2. TMT business ties positively moderate the relationship between international ambidexterity and innovation performance

(2) TMT political ties

TMT political ties refer to interpersonal social relationships of TMT members with officials of government agencies, industrial bureaus, regulatory and supporting organizations such as state banks, tax bureaus, commercial administration bureaus and other governmental agencies, which serve as an important form of social capital in emerging countries (Park and Luo, 2001; Peng and Luo, 2000; Collins and Clark, 2003). Top managers in EM MNEs tend to spend significant portions of time and energy in establishing contacts with government officials because the government department still controls a lot of strategic factor resources and has the power to decide on resource allocation and projects approval (Li and Zhang, 2007). Cultivating good networking ties with government officials means that TMT members can get financial, management and technical support much easily (Wang et al., 2015), which is significant for the smooth implementation of international ambidexterity. For example, entering such governmental programs as soft loan support, export subsidies, tax reduction and exemption can greatly reduce financial pressure and increase risk-taking capacity for EM MNEs’ foreign operation (Park and Luo, 2001; Lu et al., 2010), which is helpful for both the exploration of strategic assets through overseas mergers and exploitation of competitive advantages through greenfield investment. Lu et al. (2010) further persist that government can also offer opportunities for EM MNEs’ top managers, such as participating in international fairs, to learn foreign marketing and advanced technological knowledge, profitable for both leveraging competitive advantages and seeking novel knowledge and information overseas. Therefore, when TMT members have established close contact with government officials, international ambidextrous activities of EM MNEs will be carried out more effectively, and EM MNEs will be more likely to derive innovation value from international ambidexterity. Based on these arguments, we propose that:

H3. TMT political ties positively moderate the relationship between international ambidexterity and innovation performance

2.3.2 The moderating effect of TMTs’ resource integration.

(1) TMT contingency rewards

The way of top management members earning performance rewards influences interactions and outcomes of TMTs (Siegel and Hambrick, 2005). As a kind of pay patterns among TMT members, contingency rewards reflecting the extent to which benefits for individual team

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members hinge on their team’s collective performance (Harrison et al., 2002) are conducive for TMTs to solve complex problems and pursue complex organizational goals, which demands mutual adjustment and the transcendence of individual interests (O’Reilly and Tushman, 2004). TMT contingency rewards reduce interpersonal competition and facilitate mutual negotiation. When EM MNEs emphasize joint rather than individual rewards, an interdependent cooperative atmosphere and commitment to organizational goals have been set up, beneficial for allocating resources to differentiated international exploratory and exploitative units, mobilizing and integrating resources across differentiated units to achieve success of innovation (Clercq et al., 2013). In the study of Govindarajan and Trimble (2005), they have described how Analog Devices, a semiconductor company, avoids strong incentives tied to mature businesses’ performance and starts to evaluate and reward TMT members based on team’s collective achievements, which finally enables Analog Devices to leverage and integrate assets across differentiated exploratory and exploitative units. Therefore, we predict that TMT contingency rewards enhance the potential contributions of international ambidexterity to innovation performance through facilitating the resource sharing and integration during the implementation of international ambidexterity. Based on these arguments, we propose the following hypothesis:

H4. TMT contingency rewards positively moderate the relationship between international ambidexterity and innovation performance

(2) TMT social integration

Social integration refers to the “attraction to the group, satisfaction with other members of the group, and social interaction among the group members” (O’Reilly et al., 1989), which involves the affective factors or social forces among members of TMTs (Smith et al., 1994). Members in TMTs with higher social integration are expected to be willing to negotiate and compromise with others for team success (Barkema and Shvyrkov, 2007), indicating that senior executives always build realistic understandings of conflicting strategic agendas and make rational thinking on resource exchange and combination, which is beneficial for the pursuit of innovation profit during the simultaneous implementation of exploration and exploitation activities overseas. Social integrated TMT members are inclined to use cooperative methods and thinking to solve problems based on social interaction and trust among TMTs (Jansen et al., 2008), which suggests that TMT members responsible for exploratory and exploitative activities in foreign markets will keep close cooperation to push the resources integration contributed by differentiated units. Jansen et al. (2009) argue that social integrated TMTs can stimulate critical debate and recognize innovation opportunities through evaluating and reconsidering various possible combinations of differentiated resources. Therefore, we propose that TMT social integration facilitates the integration of resources between international exploratory and exploitative units to arrive at new innovation combinations. Based on these arguments, we propose the following hypothesis:

H5. TMT social integration positively moderates the relationship between international ambidexterity and innovation performance

3. Methodology 3.1 Sample and data collection Our study’s sample frame was drawn from several Economic Development Zones located in Zhejiang province in China, including Hangzhou, Ningbo and Wenzhou, because of its highly developed private economy and early internationalization pace (Chen et al., 2011; Wu et al.,

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2016). Due to budgetary constraints, we selected a random sample of 700 ventures from the aforementioned three zones, with 300 firms from Hangzhou Economic Development Zone, 220 firms from Ningbo Economic Development Zone and 180 firms from Wenzhou Economic Development Zone. We selected the top managers responsible for international operations and innovation management from each of the sampled firms as the key informant. In order to minimize the potential problem of common method bias originating from the same data source or a single respondent (Podsakoff et al., 2003), we followed the frequently used method to divide the survey questionnaires into two separate parts and asked for two different senior executives from the same company to answer the question.

After several rounds of phone, fax and personal follow-ups, 227 valid questionnaires (32.4%) were returned after deleting replies with missing observations. The firms were operating in a wide range of industries covering electronic information (30.40%), special equipment manufacturing (19.38%), transportation equipment manufacturing (13.22%), ordinary machinery manufacturing (12.78%), metal products (9.25%) and other industries (14.97%). We compared early (the first 25%) and late (the last 25%) respondents in terms of model variables. We observed no significant differences (p < 0.05), indicating that nonresponse bias was not a problem. As for the common method bias, because we had assured that the questionnaires were responded by two different senior executives in the same company, so the risk of common method variance could be greatly reduced through this research design (Eisenhardt and Tabrizi, 1995). The results of Harman’s one-factor test also showed that no single factor explained a majority of the variance, demonstrating that common method bias was not a serious concern in this study.

3.2 Measures 3.2.2 Dependent variable. The measurement scale of innovation performance consisted of six indicators used in prior research (Chen et al., 2011; Wu et al., 2016) to capture items such as the number, sales and novelty of new products, reflecting the performance conditions in terms of new products development and sales comparing to their principal competitors. We used a seven-point Likert scale to measure the importance of each item. Respondents were asked to compare their firm’s performance to their competitors in the same industry. We took the average of the scores on these six items to evaluate the innovation performance.

3.2.3 Independent variables. Following the approach of Gibson and Birkinshaw (2004), we operationalized international ambidexterity as the product of exploratory and exploitative internationalization. We used five items to measure exploratory internationalization based on the understanding of Makino et al. (2002) and Hsu et al. (2013) and measurement items adapted from Cui et al. (2014) on strategic asset seeking, adjusted from Luo (2002) on capability building. We created a composite measure of exploratory internationalization by averaging these five items. To measure exploitative internationalization, we also referred to the understanding of Makino et al. (2002) and Hsu et al. (2013) and used five measurement items adapted from Cui et al. (2014) on market seeking and efficiency seeking, adjusted from Luo (2002) on capability exploitation to assess the extent to which firms leveraged competitive advantages in foreign markets. We created a composite measure of exploitative internationalization by averaging these five items.

3.2.4 Moderating variables. Adapted from Peng and Luo (2000), Park and Luo (2001) and Collins and Clark (2003), we used a four-item scale to measure TMT business ties, indicating the degree to which TMTs have established close cooperation connections with external business partners, and created a composite measure of TMT business ties by averaging these four items. Similarly, we used four items to measure TMT political ties to reflect the extent to which TMTs have built friendly relationships with officials of government and its agencies and created a composite measure of TMT political ties by averaging these four items.

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The measure for TMT contingency rewards was adapted from Collins and Clark (2003) and Jansen et al. (2009), referring to the extent to which TMT incentives were tied to overall firm performance. We took the average of the scores on the four measurement items to evaluate the TMT contingency rewards. TMT social integration was measured by five items adapted from Smith et al. (1994) and Jansen et al. (2008) to assess the attraction to senior management members, satisfaction and social interaction among team members. We took the average of the scores on the five measurement items to evaluate the TMT social integration.

3.2.5 Controls. Five variables that may affect firm’s innovation were controlled. First, firm size was controlled and measured as the natural logarithm of the total employees as larger firms tended to own more resources contributed to innovation. Second, we used firm age measured by the number of years since the firm’s establishment to control for the experiential effect because we believed older firms had more internal skills and external network resources used for innovation. Third, R&D intensity was operationalized as R&D expenditures as a percentage of sales because firms with higher level of R&D investment tended to have better innovation performance. Forth, because larger TMTs may own stronger resource acquisition and information-processing capability, we also control TMT size measured through the number of senior executives who are responsible for strategy formulation and implementation (Siegel and Hambrick, 2005). Finally, industry effects may influence the extent to which organizations pursue innovation. Accordingly, five dummies were created to code industry type. The first dummy (Industry Type 1) contrasts electronic information (1) with special equipment manufacturing, transportation equipment manufacturing, ordinary machinery manufacturing, metal products plus other industries (0). Similarly, the second dummy (Industry Type 2) contrasts special equipment manufacturing (1) with all the other industries (0). The third dummy (Industry Type 3) contrasts transportation equipment manufacturing (1) with all the other industries (0). The fourth dummy (Industry Type 4) contrasts ordinary machinery manufacturing (1) with all the other industries (0). The fifth dummy (Industry Type 5) contrasts metal products (1) with all the other industries (0).

3.3 Reliability and validity of the constructs The alpha reliabilities of our constructs were greater than the recommended 0.70 (as seen in Table 1). An integrated seven-factor confirmatory factor analysis (CFA) revealed that the measurement model fits the data well (χ2 5 741.390, χ2/df 5 1.564, NNFI 5 0.958, CFI 5 0.965, IFI 5 0.965, RMSEA 5 0.047). The standardized loadings of all measurement items were greater than 0.40 as proposed and highly significant (p < 0.01), as shown in Table 1, which affirmed the convergent validity of the scales. Except that, the average variance extracted (AVE) for each construct was larger than the squared correlation of the corresponding pairs of the construct, demonstrating adequate discriminant validity.

4. Results Table 2 includes the correlations and descriptive statistics. To test our hypotheses, we conduct multiple hierarchical linear regression analysis following the approach of Umans et al. (2018), as shown in Table 3. The variance inflation factor (VIF) for each of the regression equations is far less than 10, signifying that multicollinearity is not a serious problem in this study.

In Model 1, we test Hypothesis 1, inserting control variables in step 1 and the independent variable (international ambidexterity) in step 2. The results of model 1 show that the coefficient for international ambidexterity is positive and significant (Std.β 5 0.408, p < 0.001), signifying that international ambidexterity is positively associated with innovation performance. Hypothesis 1 is supported.

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Constructs/Measurement items Standardized loadings

Exploratory internationalization (Cronbach α 5 0.963, AVE 5 0.840) 1. Recruit high-level R&D and management talent in foreign markets 0.895 2. Seek technological and marketing resources overseas for firm’s development 0.897 3. Acquire the managerial know-how of foreign peers for further improvement 0.906 4. Take advantage of foreign advanced R&D infrastructure 0.893 5. Obtain global business information and technology spillover 0.988

Exploitative internationalization (Cronbach α 5 0.921, AVE 5 0.703) 1. Leverage technological advantages in foreign markets 0.845 2. Enter into foreign markets to expand the market space 0.837 3. Intend to lower transportation cost by producing abroad 0.854 4. Utilize cheap labor and raw material in foreign markets 0.831 5. Expand into foreign markets to benefit from investment incentives 0.824

TMT contingency rewards (Cronbach α 5 0.896, AVE 5 0.687) 1.TMTmembers’variablepayisbasedonhowwellthecompanyasawholeisperforming 0.829 2. This firm uses multiple incentives (e.g. stock options, signing bonuses) to attract candidates for the TMT

0.817

3. The majority of TMT members’ pay is based on variable compensation (bonuses, stock, profit sharing, etc.)

0.792

4. Incentive-based pay for the TMT is based on how well the organization is performing as a whole

0.875

TMT social integration (Cronbach α 5 0.922, AVE 5 0.706) 1. The members of the TMT are quick to defend each other from criticism by outsiders 0.846 2. Members of the TMT get along with each other very well 0.796 3. Members of the TMT are always prepared to work together and support each other 0.896 4. Everyone’s input is incorporated into most important company decisions 0.802 5. The members of the TMT really stick together 0.858

TMT business ties (Cronbach α 5 0.912, AVE 5 0.723) 1. Members of the TMT attach great importance to cooperate with customers 0.871 2. Members of the TMT keep tight cooperation relationships with suppliers 0.840 3. The members of the TMT are always ready to cooperate with competitors 0.875 4. External business partners provide a lot of resources to support firms’ operation 0.813

TMT political ties (Cronbach α 5 0.918, AVE 5 0.738) 1. Members of the TMT pay great attention to build close ties with officials of government and its agencies

0.895

2. TMT members devote much energy to approach officials in industrial bureaus 0.828 3. TMT members receive enough support from regulatory and supporting organizations such as state banks, tax bureaus, commercial administration bureaus and other governmental agencies

0.854

4. Government and its agencies provide a lot of resources to support firms’ operation 0.859

Innovation performance (Cronbach α 5 0.985, AVE 5 0.917) 1. The number of new products 0.955 2. The ratio of new products sales to total sales 0.959 3. The speed of new product development 0.953 4. The success ratio of new product development 0.954 5. The number of patent applications 0.973 6. The novelty of new product 0.952

Note(s): All standardized coefficient loadings are significant at p < 0.001; AVE 5 average variance extracted for each multi-item construct in the research model

Table 1. Construct measurement and confirmatory factor analysis results

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M ea n

S .D .

1 2

3 4

5 6

7 8

9 1 0

1 . F ir m

si ze

7 .5 3 5

1 .3 8 7

1 2 . F ir m

a g e

1 5 .8 0

8 .2 4 6

0 .0 9 5

1 3 . R & D in te n si ty

0 .0 5 0

0 .0 2 4

0 .0 0 6

�0 .0 9 4

1 4 . T M T si ze

5 .1 9 0

1 .8 0 1

0 .4 2 2 * *

�0 .0 4 1

0 .2 7 9 * *

1 5 . In te rn a ti o n a l a m b id ex te ri ty

1 8 .4 3 5

8 .7 2 5

0 .2 3 4 * *

0 .0 4 0

0 .3 3 3 * *

0 .2 8 9 * *

1 6 . In n o v a ti o n p er fo rm

a n ce

3 .9 6 5

1 .6 7 1

0 .2 0 3 * *

0 .0 6 5

0 .3 4 4 * *

0 .2 5 9 * *

0 .5 1 6 * *

1 7 . T M T b u si n es s ti es

4 .3 5 9

1 .0 3 6

0 .0 8 1

0 .0 1 1

0 .0 2 9

0 .0 9 7

0 .1 6 7 *

0 .0 2 1

1 8 . T M T p o li ti ca l ti es

4 .4 5 4

1 .0 2 6

0 .0 4 5

0 .0 8 8

0 .1 1 1

0 .0 3 7

0 .1 3 0

0 .0 7 7

0 .4 2 7 * *

1 9 . T M T co n ti n g en cy

re w a rd s

4 .1 4 3

1 .1 2 5

0 .0 5 6

�0 .0 3 3

0 .0 3 4

0 .1 1 4

0 .1 2 9

�0 .0 7 3

0 .0 6 7

0 .0 5 2

1 1 0 . T M T so ci a l in te g ra ti o n

4 .6 1 1

1 .0 9 0

�0 .1 0 5

�0 .0 6 9

0 .0 1 4

0 .0 3 5

�0 .0 3 6

�0 .0 8 2

0 .0 5 9

0 .0 4 3

�0 .0 4 3

1

N o te (s ): * * p < 0 .0 1 ; * p < 0 .0 5

Table 2. Means, standard deviations and

correlations

International ambidexterity

in firms’ innovation

441

M o d el 1

M o d el 2

M o d el 3

M o d el 4

M o d el 5

M o d el 6

V a ri a b le s

S td .B

S td .e rr o r

S td .B

S td .e rr o r

S td .B

S td .e rr o r

S td .B

S td .e rr o r

S td .B

S td .e rr o r

S td .B

S td .e rr o r

C o n st a n ta

0 .5 7 3

0 .6 1 5

1 .3 0 1

0 .6 8 1

0 .4 9 8

0 .6 8 4

1 .7 6 7

0 .6 8 1

1 .2 2 3

0 .7 4 3

2 .7 8 3

0 .8 3 7

S te p

1 F ir m

si ze

0 .0 8 8

0 .0 8 1

0 .0 7 0

0 .0 7 8

0 .1 0 3

0 .0 7 8

0 .0 6 8

0 .0 7 8

0 .0 7 3

0 .0 8 0

0 .0 5 1

0 .0 7 5

F ir m

a g e

0 .0 5 5

0 .0 1 2

0 .0 7 8

0 .0 1 1

0 .0 6 2

0 .0 1 1

0 .0 3 8

0 .0 1 1

0 .0 5 2

0 .0 1 1

0 .0 5 0

0 .0 1 1

In d u st ry

T y p e 1

�0 .0 2 1

0 .2 9 8

�0 .0 0 8

0 .2 8 5

�0 .0 1 8

0 .2 8 8

0 .0 0 2

0 .2 9 0

0 .0 1 9

0 .3 0 2

0 .0 5 4

0 .2 8 3

In d u st ry

T y p e 2

0 .0 1 1

0 .3 1 8

�0 .0 0 7

0 .3 0 5

0 .0 0 2

0 .3 0 7

0 .0 2 4

0 .3 0 8

0 .0 6 4

0 .3 2 0

0 .0 5 5

0 .3 0 0

In d u st ry

T y p e 3

�0 .0 4 7

0 .3 6 5

�0 .0 2 5

0 .3 5 0

�0 .0 2 9

0 .3 5 3

�0 .0 2 8

0 .3 5 3

0 .0 0 4

0 .3 6 5

0 .0 3 3

0 .3 4 0

In d u st ry

T y p e 4

0 .0 3 9

0 .3 5 6

0 .0 3 2

0 .3 4 1

0 .0 4 5

0 .3 4 4

0 .0 4 5

0 .3 4 5

0 .1 0 7

0 .3 6 1

0 .0 9 6

0 .3 3 7

In d u st ry

T y p e 5

0 .0 1 1

0 .3 9 4

�0 .0 0 1

0 .3 7 8

0 .0 0 2

0 .3 8 1

0 .0 3 3

0 .3 8 4

0 .0 3 6

0 .3 9 1

0 .0 4 4

0 .3 6 7

R & D in te n si ty

0 .2 0 7 * *

0 .0 4 4

0 .1 6 6 * *

0 .0 4 2

0 .1 7 2 * *

0 .0 4 3

0 .1 9 2 * *

0 .0 4 2

0 .1 9 3 * *

0 .0 4 3

0 .1 3 4 *

0 .0 4 0

T M T si ze

0 .0 5 8

0 .0 6 2

0 .0 6 9

0 .0 6 0

0 .0 6 7

0 .0 6 0

0 .0 5 4

0 .0 6 0

0 .0 4 9

0 .0 6 1

0 .0 6 7

0 .0 5 7

R 2

0 .1 9 1

0 .1 9 1

0 .1 9 1

0 .1 9 1

0 .1 9 1

0 .1 9 1

F fo r R 2

5 .6 7 8 * * *

5 .6 7 8 * * *

5 .6 7 8 * * *

5 .6 7 8 * * *

5 .6 7 8 * * *

5 .6 7 8 * * *

S te p

2 In te rn a ti o n a l a m b id ex te ri ty

0 .4 0 8 * * *

0 .0 1 2

0 .3 6 1 * * *

0 .0 1 2

0 .3 4 6 * * *

0 .0 1 2

0 .3 8 5 * * *

0 .0 1 2

0 .3 4 6 * * *

0 .0 1 2

0 .2 8 3 * * *

0 .0 1 2

T M T b u si n es s ti es

�0 .0 6 6

0 .0 8 8

� 0 .0 8 9

0 .0 9 4

T M T p o li ti ca l ti es

0 .0 2 1

0 .0 9 1

0 .0 5 5

0 .0 9 6

T M T co n ti n g en cy

re w a rd s

�0 .1 4 8 * *

0 .0 8 2

� 0 .1 3 3 *

0 .0 7 8

T M T so ci a l in te g ra ti o n

�0 .0 5 0

0 .0 8 8

� 0 .0 6 9

0 .0 8 3

Δ R 2

0 .1 2 9

0 .1 3 3

0 .1 2 9

0 .1 4 9

0 .1 3 3

F fo r Δ R 2

4 1 .1 8 5 * * *

2 1 .2 9 4 * * *

2 0 .5 0 9 * * *

2 4 .3 6 0 * * *

2 1 .2 0 5 * * *

S te p

3 In te rn a ti o n a l a m b id ex te ri ty

* T M T b u si n es s ti es

0 .2 5 8 * * *

0 .0 1 1

0 .1 6 3 * *

0 .0 1 2

In te rn a ti o n a l a m b id ex te ri ty

* T M T p o li ti ca l ti es

0 .2 4 2 * * *

0 .0 1 1

0 .1 3 5 *

0 .0 1 2

In te rn a ti o n a l a m b id ex te ri ty

* T M T co n ti n g en cy

re w a rd s

0 .1 8 8 * *

0 .0 1 0

0 .1 5 4 * *

0 .0 1 0

In te rn a ti o n a l a m b id ex te ri ty

* T M T so ci a l in te g ra ti o n

0 .2 0 3 * *

0 .0 1 6

0 .1 5 1 *

0 .0 1 6

Δ R 2

0 .0 5 9

0 .0 5 2

0 .0 3 1

0 .0 3 3

0 .1 1 6

F fo r Δ R 2

2 0 .2 1 9 * * *

1 7 .6 2 1 * * *

1 0 .5 3 9 * * *

1 1 .0 6 3 * * *

1 1 .2 2 8 * * *

O v er a ll R 2 (O v er a ll a d j. R 2 )

0 .3 2 0 (0 .2 8 9 )

0 .3 8 3 (0 .3 4 8 )

0 .3 7 2 (0 .3 3 7 )

0 .3 7 1 (0 .3 3 6 )

0 .3 5 7 (0 .3 2 1 )

0 .4 6 4 (0 .4 1 8 )

O v er a ll F fo r R 2

1 0 .1 7 5 * * *

1 1 .0 5 8 * * *

1 0 .5 6 4 * * *

1 0 .5 2 3 * * *

9 .9 1 0 * * *

1 0 .0 0 4 * * *

M a x V IF

2 .1 4 1

2 .1 4 7

2 .1 4 4

2 .1 7 9

2 .3 0 7

2 .3 7 0

N o te (s ):

a U n st a n d a rd iz ed

co ef fi ci en t. * p < 0 .0 5 , * * p < 0 .0 1 , * * * p < 0 .0 0 1

Table 3. Results of moderated regression analysis

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In Model 2, we test Hypothesis 2, inserting control variables in step 1 and the independent variable (international ambidexterity) and the moderating variable (TMT business ties) in step 2. We insert the multiplication effect between the mean-centered scores (to minimize the multicollinearity common in moderation modeling) of the independent and moderating variables in step 3. Model 2 shows that the interaction between international ambidexterity and TMT business ties is positive and significant (Std.β 5 0.258, p < 0.001). Hypothesis 2 is supported. To facilitate interpretation, we plot this significant interaction effect in Figure 2. International ambidexterity and TMT business ties take the values of one standard deviation below and above the mean. As shown in Figure 2, the positive relationship between international ambidexterity and innovation performance is stronger when TMT business ties are close (one standard deviation above the mean) than when they are alienated (one standard deviation below the mean). These results thus support Hypothesis 2.

In Model 3, we test Hypothesis 3, inserting control variables in step 1 and the independent variable (international ambidexterity) and the moderating variable (TMT political ties) in step 2. We insert the multiplication effect between the mean-centered scores of the independent and moderating variables in step 3. Model 3 indicates that the coefficient for the interaction between international ambidexterity and TMT political ties is positive and significant (Std.β 5 0.242, p < 0.001). Hypothesis 3 is supported. This significant interaction effect is plotted in Figure 3. As shown in Figure 3, the positive relationship between international ambidexterity and innovation performance is stronger when TMT political ties are close (one standard deviation above the mean) than when they are alienated (one standard deviation below the mean). These results thus support Hypothesis 3.

In Model 4, we test Hypothesis 4, inserting control variables in step 1 and the independent variable (international ambidexterity) and the moderating variable (TMT contingency rewards) in step 2. We insert the multiplication effect between the mean-centered scores of the independent and moderating variables in step 3. Model 4 indicates that TMT contingency rewards (Std.β 5 0.188, p < 0.01) positively moderate the relationship between international ambidexterity and innovation performance. Hypothesis 4 is supported. The plot of the interaction can be found in Figure 4. As shown in Figure 4, the positive relationship between international ambidexterity and innovation performance is stronger when TMT contingency reward is high (one standard deviation above the mean) than when it is low (one standard deviation below the mean). These results thus support Hypothesis 4.

1

2

3

4

5

6

7

8

9

10

11

Low international ambidexterity High international ambidexterity

In n

o v

a ti

o n

p e rf

o rm

a n

c e

Low TMT business ties

High TMT business ties

Figure 2. Interaction plot – TMT

business ties

International ambidexterity

in firms’ innovation

443

In Model 5, we test Hypothesis 5, inserting control variables in step 1 and the independent variable (international ambidexterity) and the moderating variable (TMT social integration) in step 2. We insert the multiplication effect between the mean-centered scores of the independent and moderating variables in step 3. Model 5 suggests that TMT social integration (Std.β 5 0.203, p < 0.01) positively moderates the relationship between international ambidexterity and innovation performance. Hypothesis 5 is supported. The plot of the interaction can be found in Figure 5. As shown in Figure 5, the positive relationship between international ambidexterity and innovation performance is stronger when TMT social integration is high (one standard deviation above the mean) than when it is low (one standard deviation below the mean). These results thus support Hypothesis 5.

Model 6 is the full effect model, inserting control variables in step 1 and the independent variable and all the moderating variables in step 2 and all the multiplication effects between the mean-centered scores of the independent and moderating variables in step 3. Results of the full effect model (model 6) support the hypothesis 1–5 again.

1

3

5

7

9

11

13

Low international ambidexterity High international ambidexterity

In n

o v

a ti

o n

p e rf

o rm

a n

c e

Low TMT political ties

High TMT political ties

1

2

3

4

5

6

7

8

9

10

Low international ambidexterity High international ambidexterity

In n

o v

a ti

o n

p e rf

o rm

a n

c e

Low TMT contingency rewards

High TMT contingency rewards

Figure 3. Interaction plot – TMT political ties

Figure 4. Interaction plot – TMT contingency rewards

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5. Discussion and conclusion 5.1 Main findings How do EM MNEs succeed in the international market? With data on a sample of international firms in China’s several Economic Development Zones, we examine the role of international ambidexterity in the promotion of innovation performance and the moderating effects of TMT attributes. We find that international ambidexterity has a significant positive relationship with innovation performance. This finding is consistent with other ambidexterity studies in fields of organizational learning (March, 1991), innovation (Jansen et al., 2006) and knowledge search (Katila and Ahuja, 2002) and once again demonstrates the value of ambidextrous strategy in an international context.

We also find that this positive relationship between international ambidexterity and innovation performance becomes stronger when TMT builds close ties with external business partners and political departments. We argue that TMTs can help EM MNEs accumulate a lot of resources to drive the concurrent implementation of exploration and exploitation activities through establishing a stable and close relationship embedding in both external business and political networks. This means EM MNEs on the one hand can follow the traditional routine to build external business ties to accumulate resources, and on the other hand, they can rely on political ties to seek financial, management and technical support to enhance the innovation outcomes that originate from international ambidexterity. This finding is consistent with other research on emerging market enterprises, which highlights not only the importance of business ties but also the unique role of political ties in firm’s development (Peng and Luo, 2000; Li and Zhang, 2007; Lu et al., 2010).

Except that, the results also show that international ambidexterity contributes more to innovation performance when rewards of TMT members depend to a greater extent on collective performance and when TMTs keep higher degree of social integration. Carrying out contingency rewards in TMTs may bring top managers together and discourages individual departments from focusing only on their own interests, such that these conditions motivate top managers to openly share resources to maximize interest of international ambidexterity. Except that, higher social integrated TMTs mean higher degree of compromise and more adequate communication among TMT members, which facilitate fair resource allocations and free exchange of resources across functional borders. Our findings thereby echo previous research on the acclaimed benefits of contingency rewards in stimulating TMTs’ collective motivation (Clercq et al., 2013) and of social integration in

1

3

5

7

9

11

13

Low international ambidexterity High international ambidexterity

In n

o v

a ti

o n

p e rf

o rm

a n

c e

Low TMT social integration

High TMT social integration Figure 5.

Interaction plot – TMT social integration

International ambidexterity

in firms’ innovation

445

increasing collaborative problem-solving (Jansen et al., 2008) to promote the successful implementation of complex strategies.

5.2 Theoretical and managerial implications This study makes several important contributions to the literature. First, our findings can contribute to the literature on how well EM MNEs will succeed. While the rapid growth of EM MNEs has attracted enough attention in academia, most previous studies have focused on the distinct motivation, antecedents and performance implication of EM MNEs, ignoring to answer the question about how to successfully internationalize (Luo and Rui, 2009; Luo and Zhang, 2016). In our literature search, a few existing scholars have put forward the ambidextrous perspective of EM MNEs, and there is only scant large sample empirical research investigating how and when international ambidexterity affects EM MNEs’ innovation. Our study advances the international business literature on EM MNEs by providing empirical evidence that EM MNEs can avoid the competence trap caused by exploitative internationalization and reduce the uncertainty of exploratory internationalization through implementing international ambidextrous strategy. This study also extends extant understanding and enriches the context specificity of international ambidexterity (Hsu et al., 2013), suggests that the value of conducting international ambidexterity in EM MNEs’ innovation depends upon the extent of whether TMTs of EM MNEs can accumulate enough resources (through TMT business ties and TMT political ties) and integrate resources effectively (through TMT contingency rewards and TMT social integration).

Second, our findings can contribute to the literature on organizational ambidexterity. Although existing research in various ambidextrous studies has highlighted the significant role of resource endowment and resource exchanges in enabling ambidexterity (Gibson and Birkinshaw, 2004; Jansen et al., 2009; Cao et al., 2009; Clercq et al., 2013), it offers only limited theoretical insights into how such internal contextual conditions as TMT attributes and their effects on resource accumulation externally and resource integration within the firm affect the performance outcomes related to firm ambidexterity. Our main contribution thus is to uncover the contingency context of several TMT attributes under which the simultaneous pursuit of exploratory and exploitative internationalization may, or may not, contribute to innovation performance. In particular, we have considered the role of TMT business ties and TMT political ties in accumulating resources externally and TMT contingency rewards and TMT social integration in promoting the resource flow and integration between different exploratory and exploitative units. Our results provide evidence to support the argument that TMTs play a vital role in gaining performance income from organizational ambidexterity.

Third, our study extends the international ambidexterity–performance literature with empirical tests of EM MNEs. Although the literature has informed the uniqueness of ambidexterity for EM MNEs, and most of the theoretical and empirical discussions of international ambidexterity are carried out in the context of emerging economies (Prange and Verdier, 2011; Hsu et al., 2013; Bandeira-de-Mello et al., 2016), this does not mean that international ambidexterity is not suitable for MNEs from developed countries (Chen and Chen, 1998; Makino et al., 2002). Our study extends this school of literature by demonstrating that the simultaneous pursuit of exploration and exploitation activities can avoid the trap of a one-sided focus on the exploitation aspect, which is also very inspiring for international companies in developed countries. Except that, to enhance the innovation performance of international ambidexterity, our study further proposes that MNEs should seek enough resources through external network, conduct contingency rewards among TMT members and establish a highly social integrated TMT to enhance the innovation performance of international ambidexterity.

Fourth, our study also contributes to research on external ties of firms in emerging economies. Existing research has demonstrated that external ties with governmental officials

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(Li and Atuahene-Gima, 2002; Li and Zhang, 2007; Peng and Luo, 2000; Xin and Pearce, 1996), ties with other firms (Peng and Luo, 2000), ties with foreign firms (Li and Atuahene-Gima, 2002) and ties with service intermediaries (Zhang and Li, 2010) are vital for firms’ success in emerging economies. However, these studies do not reveal how different types of external ties jointly affect firms’ performance in emerging economies. As an international expansion strategy, international ambidexterity can be seen as a channel for building foreign relations (Wu et al., 2017). According to this logic, we add to the aforementioned literature by showing that ties with business partners and government departments enhance the value of ties with foreign firms in firm’s innovation performance. That is, ties with business partners and government department are complementary with ties with foreign firms.

Our study also provides important guidelines and practical implications in management and policymaking. Although exploring or exploiting overseas each can contribute to the improvement of innovation performance, managers of EM MNEs should notice that overemphasizing a single aspect is not conducive to the firm’s sustainable and healthy development and should go to great lengths to conduct exploratory and exploitative internationalization simultaneously. More importantly, to maximize the benefits stemming from the synchronous pursuit of exploration and exploitation overseas, EM MNEs should be aware of the role of TMTs played in determining whether these activities can be conducted successfully. On one hand, TMT members should actively embed in their external business and political networks to get enough resource support for the strategic implementation of international ambidexterity. On the other hand, EM MNEs should link top managers’ income to team collective performance and create a highly social integrated TMT to drive effective flow and integration of resources, which assure the potential innovation benefits of international ambidexterity. For policymakers, our findings suggest that policymakers in emerging markets should develop unbiased incentive policies, which guide EM MNEs to pay equally high attention to both exploration and exploitation activities in foreign markets.

5.3 Limitations and future research directions This study contains some limitations that offer opportunities for further research. Firstly, we define international ambidexterity as the interactive configuration of explorative and exploitative internationalization, which only partly captures the content of international ambidexterity. According to the understanding of Luo and Rui (2009), international ambidexterity is a multidimensional term comprising coevolution, cocompetence, co- opetition and co-orientation. Therefore, we just empirically test the co-orientation dimension of international ambidexterity, and it is worthwhile for future research to test the innovation effect of three other dimensions.

Secondly, future research can consider such TMT network constructs as network size, networkrange,strength ofties (Collinsand Clark,2003),TMTintegration mechanismasshared vision (Jansen et al., 2008) or even organizational integration mechanism as cross-functional interface and connectedness (Jansen et al., 2009). Except that, this study mainly focuses on the contingent role of four TMT attributes and ignores many other internal and external factors, such as CEO–TMT interactional interface (Cao et al., 2010), internal task interdependence and external competitive pressure (Clercq et al., 2014); future research could investigate the moderating roles of complex constellations of multiple internal and external factors.

Thirdly, we have just investigated the innovation implication of international ambidexterity, and do not touch on the antecedents, which leave a huge theoretical gap for future research to enrich the ambidexterity perspective toward EM MNEs. For example, future studies may conduct an integrated survey to explore the comprehensive role of structural, contextual and leadership conditions together in facilitating the appearance of international ambidexterity. Moreover, because dynamic capabilities are vital for the realization of

International ambidexterity

in firms’ innovation

447

international ambidexterity (Prange and Verdier, 2011), future studies can also focus on different types of supporting dynamic capabilities in promoting international ambidexterity.

Finally, although our hypotheses have a strong theoretical grounding, the cross-sectional nature of our research design makes us cautious in inferring the direction of causality, which demands for a longitudinal research design. Longitudinal designs could elucidate and distinguish among various internal causal processes by studying the relationships among international ambidexterity, innovation performance and internal and external contingencies over time. Except that, our results are confined to surveys of international manufacturing firms in Zhejiang province of China, limiting the generalizability of the results to some extent. Therefore, a natural extension of our study would be to compare the relationship between international ambidexterity and innovation performance and the moderating roles of TMT between manufacturing firms and service firms or within other emerging economies.

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Corresponding author Jin Chen can be contacted at: [email protected]

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