Abstract: Enterprise innovation behavior and consequences should be jointly shaped by institution-, industry-, and resource-related factors. Drawing on the “Strategy Tripod” perspective to integrate the institution-, industry-, and resource-based views, we propose that balancing between exploitative and exploratory innovation (i.e., innovation ambidexterity) among China’ enterprises participating in the “Belt and Road” initiative (BRI) can be affected by the BRI policy itself, which is further moderated by product market competition, and firm financial slack, respectively. Treating the BRI implementation as a natural experiment, we employ the China’s A-share listed companies’ data from 2010 to 2019 and the differences-in-differences (DID) approach to empirically test the impact of BRI on innovation ambidexterity. Our findings provide evidence that the implementation of BRI significantly improves innovation ambidexterity of the BRI-participating enterprises, and this effect is more pronounced for privately-owned companies, and those in emerging advantageous industries and located in export-oriented node cities along the Belt and Road. Furthermore, product market competition significantly enhances the impact of BRI on innovation ambidexterity of the BRI-participating companies which tend to use innovation as a weapon to cope with the increasing competition pressure, whereas financial slack dampens such an effect due to the increasing threat of agency problems.

Key words: the "Belt and Road" initiative (BRI), product market competition, financial slack, innovation ambidexterity, strategy tripod perspective