Title: Firms' perceptions of Sino-US trade uncertainty and exploratory innovation: contingent roles of individual-, firm- and industry-level factors

Authors: Zhonghua Cai; Baohua Feng; Caiting Dong; Junyi Wu

Addresses: School of Economics and Management, Beijing University of Chemical Technology, Beijing, 100029, China ' School of Economics and Management, Beijing University of Chemical Technology, Beijing, 100029, China ' School of Business Administration, Chongqing Technology and Business University, Chongqing, 400067, China ' Strait Talent Development Research Institute, Fujian Business University, Fuzhou, 350000, Fujian, China

Abstract: The escalating Sino-US trade tensions have increased the degree of environmental uncertainty faced by firms; however, the impact of such uncertainty on exploratory innovation remains understudied. Drawing on real options theory, we investigate how firms' perceptions of Sino-US trade uncertainty influence their exploratory innovation and how this relationship is moderated by individual-, firm-, and industry-level contingencies (i.e., top management teams with R&D backgrounds, financial slack, and industrial competition). Analysing a panel dataset of 1,119 Chinese listed manufacturing firms from 2014 to 2020, we observe a negative association between firms' perceptions of Sino-US trade uncertainty and their exploratory innovation. This negative effect is mitigated if firms possess a higher proportion of top management team members with R&D backgrounds or ample financial slack, or if industrial competition is intense. These findings deepen our understanding of firms' innovative activities in uncertain environments.

Keywords: firms' perceptions of Sino-US trade uncertainty; exploratory innovation; real options theory.

DOI: 10.1504/IJTM.2025.151676

International Journal of Technology Management, 2025 Vol.98 No.2/3/4, pp.174 - 200

Received: 31 Mar 2024
Accepted: 13 Feb 2025
Published online: 13 Feb 2026 *

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