The role of innovation strategies in balancing growth and profit: evidence from Colombian firms

Research highlights the significant impact of exploratory, exploitative, and ambidextrous innovation strategies on firm performance. Ambidextrous innovation is particularly effective, enhancing performance in both emerging and developed markets. However, the differential effects on growth and profitability in resource-constrained emerging markets are still not fully understood. This study employs panel data regression to analyze the influence of these innovation strategies on 1047 Colombian manufacturing firms from 2007 to 2018, with a specific focus on the moderating role of diverse knowledge sources. Findings indicate that ambidextrous innovation positively correlates with both growth and profitability. In contrast, firms focusing solely on either exploratory or exploitative strategies experience negative impacts on domestic growth. The integration of a broad range of knowledge sources further amplifies the positive effects of ambidextrous innovation. This research provides valuable insights for effectively leveraging innovation strategies in emerging markets, offering a strategic framework for firms and policymakers in resource-constrained environments.