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The moderating effect of exploitative and exploratory learning on internationalisation–performance relationship in SMEs

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Abstract

The internationalisation of small and medium enterprises (SMEs) is an increasing phenomenon, but the effective advantages of internationalisation have been disputed yet. This study extends internationalisation research by focusing on learning perspective to investigate the relationship between the firm’s internationalisation and performance. Specifically, a path regression model is applied to examine how exploitative and exploratory learning is able to moderate SMEs’ exporting process to drive business performance. The differences in organisational learning are further investigated compared to domestic firms. The findings suggest that exploitation does not affect SMEs’ internationalisation–performance link, but it is likely a critical antecedent to efficiently move to global markets, while exploration plays a significant role to positively leverage the effect of international involvement on business performance.

Resumen

Aunque la internacionalizaciòn de las pequeñas y medianas empresas (PYME) es un fenomeno cada vez màs extendido, todavia hay muchas dudas sobre sus reales beneficios en terminos de  rendimientos financieros. Este estudio contribuye a la investigación sobre la internacionalizaciòn analizando la relaciòn entre la internacionalizaciòn y el rendimiento desde una perspectiva basada en el aprendizaje. En primer lugar, se ha realizado una comparaciòn entre empresas internacionales y empresas locales para evaluar la existencia de diferentes niveles de aprendizaje. Despuès, un modelo de análisis de senderos ha sido implementado para estudiar el rol del aprendizaje de explotación y exploración para moderar el efecto del proceso de exportaciòn de los rendimientos de las PYME. Los resultados demuestran, por una parte, que el aprendizaje de explotación no afecta en la relaciòn entre la internacionalizaciòn y el rendimiento y podria ser màs bien una condiciòn previa para acceder al mercado global, y por otrolado, al contrario, el aprendizaje de exploración favorecido del aumento de la implicaciòn internacional genera efectos positivos sobre los rendimientos financieros de empresas.

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Notes

  1. European Union programmes or policies specifically define micro, small and medium-sized enterprises according to their employees’ number and turnover. Micro firms employ fewer than 10 persons and turnover not exceed EUR 2 million, small firms employ fewer than 50 persons and turnover not exceed EUR 10 million, medium firms employ fewer than 250 persons and turnover not exceed EUR 43 million.

  2. Specifically, two internationalized firms are excluded because of financial performance much higher than sample’s average.

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Acknowledgments

The authors would like to thank the editor and three anonymous reviewers for their constructive and invaluable comments and suggestions during the review process. They would also like to thank the management and the staff of CNA Emilia Romagna for being exceptionally collaborative in providing data and support this research study. We further thank Cristina Mateo Lobato for helpful comments and Spanish translation support.

Ethical statement

The authors declare that the research was conducted in accord with prevailing ethical principles.

Conflict of interest

The authors declare that they have no conflict of interest.

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Authors and Affiliations

  1. Department of Economics, Management and Quantitative Methods, University of Milan, via Conservatorio 7, 20122, Milan, Italy

    Ivan De Noni

  2. Department of Economics, University of Padua, Padua, Italy

    Roberta Apa

Authors
  1. Ivan De Noni
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  2. Roberta Apa
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Correspondence to Ivan De Noni.

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Summary highlights

Contributions: Since the uncertainty related to internationalisation–performance relationship for both small and large businesses, this study focuses on SMEs’ internationalisation in order to examine the role of exploitative and exploratory learning in leveraging the effect of exporting process on financial performance.

Purpose/research question: Does international involvement of SMEs affect their business performance? What is the role of learning on internationalisation–performance link? Are the exporting SMEs more learning oriented than domestic ones? And, more specifically, how does the exploitative and exploratory learning moderate the effect of SMEs’ exporting on business performance?

Findings/results: Path regression model is implemented to test our hypotheses using data from 311 Italian SMEs mainly in the manufacturing and construction industries. We find that the exporting SMEs are more exploitative and exploratory learning oriented than domestic ones. However, while exploratory learning strongly influences the effect of international involvement on performance, exploitative learning is mainly to be considered as a significant antecedent to successfully move to foreign markets.

Limitations: While providing interesting insights, our study is limited in terms of the sample number and geo-distribution and the measures operationalisation.

Theoretical implications and recommendations: This study contributes new empirical evidence of the relationship between internationalisation and business performance in SMEs. According to the authors, looking at moderating role of learning is crucial to enhance business performance through internationalisation.

Practical implications and recommendations: In early internationalisation, policy makers have to support entrepreneurs in developing adequate organisational competences and routines to move to global markets. Then, regional policies have to sustain SMEs’ international involvement and exploratory learning by encouraging external knowledge assimilation and by providing proactive platforms to foster the creation of trustful and cooperative networks with foreign customers, suppliers, and partners.

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De Noni, I., Apa, R. The moderating effect of exploitative and exploratory learning on internationalisation–performance relationship in SMEs. J Int Entrep 13, 96–117 (2015). https://doi.org/10.1007/s10843-015-0148-6

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