Examining the interaction effect of digitalization and highly educated employees on ambidextrous innovation in Chinese publicly listed SMEs: A knowledge-based view

Abstract

With the advancement of technology, digitalization has attracted increasing attention in recent years. Previous studies have linked firm digitalization to innovation performance; however, less attention has been given to ambidextrous innovation and small and medium-sized enterprises (SMEs), which play a vital role in economic development. Based on a knowledge-based view (KBV), this research investigates the relationship between digitalization and ambidextrous innovation in Chinese publicly listed SMEs. We found that digitalization promotes radical innovation more significantly than incremental innovation of listed SMEs. We further observed that firm digitalization and highly educated employees with a master's degree or above have a complementary effect on radical innovation, and the financial background of firms' top management team (TMT) members strengthens strengthens this complementary effect. This study not only enriches the digitalization–innovation performance relationship literature, but also contributes to the KBV by tying together three vital elements (technology, people, and relational networks) in the KBV and examining their relationships with ambidextrous innovation. It also has implications for managers of SMEs related to increasing the innovation returns from digitalization endeavors.