International Network Searching, Learning, and Explorative Capability: Small and Medium-sized Enterprises from China
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International Network Searching, Learning, and Explorative Capability: Small and Medium‑sized Enterprises from China Shufeng Simon Xiao1 · Yong Kyu Lew2 · Byung Il Park2 Received: 17 January 2020 / Revised: 1 February 2020 / Accepted: 6 March 2020 © Springer-Verlag GmbH Germany, part of Springer Nature 2020
Abstract This study investigates the extent to which international learning intent and different dimensions of international network searching (i.e., breadth and depth) contribute to innovation performance of emerging market small and medium-sized enterprises (ESMEs). We contend that simple international network searching or motivation for learning does not guarantee the successful innovation of ESMEs. The present study posits that the international explorative capabilities of these ESMEs enable them to transform knowledge from external network resources into innovation performance. We collected data from 204 China-based ESMEs and analyzed these data using structural equation modeling. Findings demonstrate that international learning intent and breadth of international network positively affect ESMEs’ own explorative capability and thus innovation performance. However, the depth of international network does not significantly influence international explorative capability. Using learning and network searching perspectives on ESMEs’ internationalization, this study elucidates that ESMEs can improve their own innovation performance by improving access to and application of external knowledge learned through extensive international partner networks. Keywords Emerging market firms · International learning intent · Breadth of international network · Depth of international network · Explorative capability
1 Introduction A key question in international business centers the reasons for firms to expand internationally. Due to this, an extensive body of internationalization literature has explored the factors that drive outward foreign direct investment (FDI) of
* Yong Kyu Lew [email protected] 1
Division of Business Administration, Sookmyung Women’s University, Seoul, South Korea
2
HUFS Business School, Hankuk University of Foreign Studies, Seoul, South Korea
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multinational enterprises (MNEs) (Dunning 1988; Hymer 1960; Rugman 2009). For example, Dunning’s eclectic paradigm highlights the central role of possessing firmspecific ownership advantages and exploiting such advantages in driving outward FDI behaviors of MNEs; this paradigm is probably the most influential theory for explaining the reasons MNEs engage in outward FDI (Rugman et al. 2011). These assumptions are applicable to conventional MNEs from advanced economies, which generally develop firm-specific competitive advantages that they will soon exploit and transfer abroad through outward FDI. Thus, foreign investment allows MNEs from developed economies to internalize their ownership advantages. However, emerging market firms are less likely to possess strong home-based competitive advantages and capabilities
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