From either or to superior more: CEO paradox mindset as a catalyst for high-quality ambidextrous innovation

Purpose This study aims to examine how chief executive officer (CEO) paradox mindset (CPM), a cognitive ability to embrace and integrate contradictory demands, affects innovation quality and ambidextrous innovation balance in European firms. Grounded in paradox theory and upper echelons theory, CPM is conceptualized as a higher-order capability that enables leaders to balance exploration and exploitation effectively. Design/methodology/approach A novel paradox language index (PLI) is developed using natural language processing of earnings-call transcripts and matched to patent data for 1,106 European listed firms (2012–2022). Panel regressions (fixed-effect ordinary least squares, two-stage least squares and system generalized method of moments) are employed to test the PLI's effect on innovation quality and balance, with robustness checks addressing lag structure, firm size, industry and alternative topic-model specifications. Findings Paradox-minded CEOs are associated with superior innovation outcomes, consistently outperforming peers in both quality and innovation balance. These results are robust across estimation methods and firm characteristics, highlighting CPM's strategic importance in managing competing innovation demands and mitigating the risks of inertia or myopia. Originality/value This is the first large-scale archival study to empirically assess CEO paradox mindset in the context of innovation. It advances paradox and upper-echelon theories by demonstrating how executive cognition drives firm-level outcomes. The study also contributes to microfoundations research and offers a practical natural language processing-based measure for identifying leaders capable of sustaining high-quality, balanced innovation.