Business strategy aggressiveness and firm innovation: evidence from listed companies in China

Although business strategy aggressiveness plays a fundamental role in firm operations, it is unclear whether and how it affects firm innovation. Drawing on the risk perspective, this paper uses the panel data of A-share listed firms on the Shanghai and Shenzhen stock exchanges from 2008 to 2022 as research sample to explore the impact of business strategy aggressiveness on firm innovation and its boundary conditions. The results show an inverted U-shaped relationship between business strategy aggressiveness and firm innovation. In addition, older CEOs and higher-educated CEOs tend to be risk-averse, which will weaken the inverted U-shaped relationship. Male CEOs are less risk-averse, which will strengthen the inverted U-shaped relationship. The findings help analyse the mechanism of business strategy aggressiveness from the risk perspective, and provide new explanatory logic for the research on firm innovation.