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Abstract Drawing upon institutional theory and leadership styles, this research investigates how institutional pressures drive small and medium-size enterprises (SMEs) to take on ambidextrous innovation and effects moderated by leadership style. The supposedly consequential model is tested using survey data obtained from 247 SMEs in China. Findings point out that three dimensions of institutional pressures, (i.e. normative, mimetic, and coercive) are positively associated with the ambidextrous innovation intention of SMEs. In addition, leadership styles (i.e. transformational and transactional) plays different roles in the associations between the three dimensions of institutional pressures and the aforementioned intention. Transformational leadership negatively moderates the effects of normative and mimetic pressures whereas positively moderates the effects of coercive pressures. By contrast, transactional leadership positively moderates the effects of normative and coercive pressures but lacks moderating effects on mimetic pressures. This research likewise discusses the implications and directions for future research.
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