Export Performance in SMEs:The Importance of External Knowledge Search Strategies and Absorptive Capacity.
| Verfasser | Ferreras-Mendez, Jose Luis |
| Posten | RESEARCH ARTICLE |
1 Introduction
In small and medium enterprises (SMEs), exporting is considered one of the common options for introducing products into new markets as it provides sufficient flexibility to test the market and evaluate the potential that their products may have in a new context (Anderson and Gatignon 1986). Furthermore, SMEs usually lack the resources, capabilities and market power enjoyed by traditional multinational enterprises to introduce their products into foreign markets. Exporting has therefore been considered as one of the initial mechanisms that SMEs may use to foster internationalisation (Contractor 2007; Knight 2001; Pla-Barber and Alegre 2007). In fact, the complexities of international operations tend to be considerably more challenging for SMEs given their relatively low resource base compared to their larger rivals (Bonaccorsi 1992; Leonidou 2004).
Therefore, many SMEs often rely on external resources for both new entry and further development of their innovation behaviour (Oparaocha 2015). One of the most common routes SMEs follow to access relevant new external knowledge is to acquire it by fostering collaboration with external partners. The new links sustained with external partners allow organisations to accelerate the innovation process, as these connections provide access to fresh ideas or practices that have already been implemented in other contexts and organisations (Birkinshaw et al. 2008).
However, recent studies highlight considerable variations in performance among firms depending on their ability to master the challenges associated with external collaborations (Saebi and Foss 2015). Many factors have been identified to explain these differences, such as product complexity, the cost of interacting with external agents or research capabilities of the firms (Saebi and Foss 2015; Sofka and Grimpe 2010; Wynarczyk 2013). In this line, some studies suggest that it is important to capitalise on the benefits from external knowledge about international markets, and to do this firms need to possess absorptive capacity in the first place (Ahimbisibwe et al. 2016). Cohen and Levinthal (1990, p. 128) define absorptive capacity (AC) as "a firm's ability to recognise the value of new external information, assimilate it, and apply it to commercial ends". Evidence from previous studies suggests that sustained relationships with either a limited number or a broad range of external channels allows firms to continuously adapt their knowledge base and improve their AC in order to respond to the rapid and unpredictable changes taking place in the environment. Therefore, by exploring, transforming and exploiting their external collaboration network, firms are able to pursue the outcomes they desire in foreign markets (He et al. 2015; He and Wei 2013; Saebi and Foss 2015; Wang et al. 2013).
However, while previous findings have suggested a positive connection between external learning and exports (Villar et al. 2014), few studies explicitly analyse how the type of collaborating partner contributes to the development of AC and the firm's export performance (Chen et al. 2011; He and Wei 2013). This need for further research is especially important in the context of SMEs. Previous studies in the literature on alliances suggest that collaboration with suppliers and customers plays a different role than collaboration with universities and research institutes, as these two orientations provide access to different types of knowledge and resources (Chen et al. 2011; Rothaermel and Deeds 2004). For instance, the nature and kind of knowledge required by one of the collaborating firms may also affect the knowledge transfer, particularly through the type of mechanism required for its transfer (Murovec and Prodan 2009). Therefore, knowledge search mechanisms could influence knowledge transfer and the development of AC.
In this study we propose two types of orientation that firms may adopt in their external knowledge search process: orientation to collaborate with industrial partners, and orientation to collaborate with non-industrial partners. Interaction with agents within the industry enables firms to increase their knowledge about their market and enhance their capability to commercialise their products (Jraisat et al. 2013).
By contrast, drawing knowledge from non-industrial partners such as research agents provides a firm with the opportunity to explore new technological areas while helping to broaden its technological knowledge base (Un et al. 2010).
Furthermore, while a number of studies have examined the impact of AC on innovation outcomes and organisational performance, further research is required to understand its impact on SMEs' export performance. The international business (IB) and industrial marketing and purchasing (IMP) literatures provide a wealth of evidence for the relevance of external networks (Andersson et al. 2007; Ford and Hakansson 2006; Hakansson and Ford 2002), especially in the context of multinationals and subsidiaries (Andersson 2004; Andersson and Forsgren 2002). However, there is a need for careful analysis of the connections between external knowledge search strategies, AC and SMEs' export performance. In an attempt to close this gap, this paper aims to: (1) investigate the role of the orientation of external knowledge search strategies in improving firms' AC, that is, in improving firms' ability to assimilate, transform and apply external knowledge; and (2) assess the effects of AC on export performance. We test our hypotheses on data from a recent survey of 222 exporting SMEs in Spain. By doing so, this study connects IB and IMP perspectives with the literature on AC and external knowledge search strategies.
The paper is structured as follows. In Sect. 2, we provide a literature review and propose three research hypotheses. Section 3 presents the methodology used in the empirical study and describes the characteristics of the sample data. Section 4 reports the results, and finally, the conclusions and implications are discussed in Sect. 5.
2 Conceptual Background and Hypotheses
2.1 The Concept of Absorptive Capacity
Although they did not formulate the concept of absorptive capacity (AC), Cohen and Levinthal are considered to be the first authors to apply learning theory to conceptualise AC. In their seminal work published in 1990, they defined AC as a three-component concept designed to: Recognise the value of new external information, assimilate it, and apply it to commercial ends. In this conceptualisation, Cohen and Levinthal (1990) put R&D at the centre of a firm's innovation process by linking it to both learning and innovation performance.
Since its introduction, the concept has been analysed at the individual, business unit and organisational level in fields such as strategic management and innovation to explain the differences in performance among firms (Lane et al. 2001; Mariano and Walter 2015). The concept of AC has been continuously developed, giving rise to various definitions and ways to operationalise it. Some studies have introduced unidimensional operationalisation using proxy measures such as R&D investment and knowledge base of the firm (Mowery et al. 1996; Tsai 2001). However, these measurements fail to capture the rich theoretical arguments and the multidimensional nature of the construct (Volberda et al. 2010). Other empirical studies have provided empirical evidence for the relatively low explanatory power of using R&D spending as a proxy in comparison to the explanatory power of capturing the various dimensions of AC (Ferreras-Mendez et al. 2015; Lim 2009).
One of the first studies to attempt to integrate the insights generated in previous research into Cohen and Levinthal's (1990) original definition and to link AC and organisational learning theoretically is the work of Lane et al. (2006). These authors defined AC as a "firm's ability to use externally held knowledge through three sequential processes: (1) recognising and understanding potentially valuable new knowledge outside the firm through exploratory learning; (2) combining existing knowledge with externally acquired knowledge through transformative learning; and (3) using the assimilated knowledge to create new knowledge and commercial outputs through exploitative learning" (Lane et al. 2006, p. 856). They posit that AC represents a dynamic capability which is nurtured by learning process that allow firms to create, extend or modify their knowledge base (Todorova and Durisin 2007).
In this paper we adopt the process-based definition of AC introduced by Lane et al. (2006) as it helps to capture the multidimensional and dynamic nature of the concept.
2.2 External Knowledge Search and Export Performance
The internationalisation literature has identified many factors as determinants of export performance. In this line, firm innovativeness has received particular attention in the exporting context (Fernandez-Mesa and Alegre 2015). Some studies suggest that a firm's innovativeness represents a strategic resource that gives firms the ability to exploit international opportunities by offering customers products and services that satisfy their needs efficiently (Boso et al. 2013, 2016; Eberhard and Craig 2013). As SMEs usually have scarce internal resources available to foster innovations, they may use inter-organisational collaboration to gain access to relevant knowledge located outside their boundaries (Knight 2001).
The use of external technology and knowledge allows firms to accelerate the process in which ideas are converted into new and novel products and brought into the market (Haddoud et al. 2017). For instance, firms' external knowledge search may provide access to information, new technologies and modern laboratory facilities, as well as major R&D investment that may take years for SMEs to acquire in-house (Chesbrough 2012).
In addition, external collaboration may help SMEs to...
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