Success Patterns of Exploratory and Exploitative Innovation: A Meta-Analysis of the Influence of Institutional Factors

Abstract

Research has frequently argued that firms need to pursue exploratory and exploitative innovation strategies to be viable in an environment of technological change and intensified competition. However, it remains unclear whether exploratory and exploitative innovations are equally successful in different institutional environments. This meta-analysis synthesizes previous empirical findings to reveal under which institutional conditions firms benefit most from exploratory or exploitative innovation. We distinguish between institutional conditions that affect the success derived from exploratory and exploitative innovations through (a) the availability of resources and (b) attitudes toward innovation and the willingness of stakeholders to allocate resources to both innovation types. Our results show that national culture has a strong impact on the success of exploratory innovations, whereas only uncertainty avoidance influences the benefits derived from exploitative innovations. Socioeconomic conditions are equally important for the success of both innovation types. Our findings are of high practical relevance as due to increasing globalization more and more firms operate internationally and managers have choices regarding the location of their exploratory and exploitative innovation activities.