Entrepreneurial Intensity and Firm Performance: The Role of Institutional Ambidexterity

The performance implications of entrepreneurial intensity and ambidexterity have been extensively, yet separately, examined. In addition, past research has seldom analyzed the performance implication of ambidexterity at institutional levels. Moreover, questions remain unanswered regarding the benefits that derive from the ambidextrous levels of institutional environments. To address this issue, this paper uses the concept of institutional ambidexterity, which is the balanced and simultaneous presence of both exploration and exploitation orientations that are derived from the layers of the firms’ institutional environment. A model is developed to analyze the role of institutional ambidexterity on entrepreneurial intensity and its moderating effect on the relationship between entrepreneurial intensity and firm performance. This model is empirically tested on a very large sample in the French wine context. First, the results uncover some interesting differences in the underlying drivers of entrepreneurial intensity in ambidextrous versus nonambidextrous multilayered institutional environments. Second, the results also show that entrepreneurial intensity positively influences firm performance. Finally, decomposition analyses further indicate that institutional ambidexterity moderates the influence between entrepreneurial intensity and perceptual as well as objective measures of performance.

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