Digital Transformation and Innovation Strategy Selection: The Contingent Impact of Organizational and Environmental Factors

Numerous scholars have attempted to explain the factors allowing the use of ambidextrous innovation strategies (AISs), including balanced ambidexterity (BA) and combined ambidexterity (CA). However, scholars have yet to consider digital transformation (DT) as a possible antecedent, despite its soundness in guiding firms in their selection of appropriate innovation strategies in this digital era. This study constructs a theoretical framework of the effect of DT on firm AISs and evaluates the proposed hypotheses using panel data from Chinese listed companies from 2011 to 2021. Results indicate that DT has an inverted U-shaped impact on BA but a positive and linear effect on CA. The examination of the moderating effects reveals that organizational slack negatively moderates the positive contribution of DT to CA, and industrial competition can flatten the relationship between DT and BA. The results hold after a series of robustness tests is conducted. Our findings can provide new theoretical and practical insights into DT and innovation strategy research.