Loading...
Thumbnail Image
Publication

Entrepreneurial orientation and export performance in emerging market SMEs: The role of absorptive capacity, explorative and exploitative learning and networking

Abstract
The export performance (EP) of small and medium-sized enterprises (SMEs) operating in emerging markets is shaped by a complex interplay of contextual, firm-level, and individual, factors. At the individual level, entrepreneurial orientation (EO)—reflecting the strategic posture of SME owners and managers—has been recognised as a key driver of internationalisation. At the firm level, the ability of SMEs to compete globally is frequently constrained by limited resources and capabilities. At the contextual level, emerging markets present institutional and infrastructural challenges that further hinder international expansion. While EO has been widely studied, gaps remain in understanding how its individual dimensions function in resource-constrained environments, and how firm-level mechanisms such as learning and networking enhance its effectiveness in driving EP. Further, there remains a gap in understanding how the dimensions of EO function individually and collectively in the SME context, especially in resource-constrained emerging context environments like Sri Lanka. Moreover, the role of learning and networking in enhancing EP is not yet fully understood and needs more research. Specifically, how different types of learning (such as learning from own experience or learning from others’ experience) and networking (whether through formal strategically formed business channels or informal connections) help improve the international success of SMEs is still unclear. Therefore, this thesis will explore how these learning and networking activities act as bridges, helping EO lead to better export outcomes. Since SMEs in these markets face significant resource constraints, learning from others’ experiences—also known as vicarious learning—can be a cost-effective and vital strategy that remains an underexplored area in the literature. This thesis also explores how a firm’s absorptive capacity, or its ability to internalise and apply knowledge gained through social learning, can enhance EP. This thesis is based on data collected from 365 SME owners and managers in Sri Lanka through a structured questionnaire. Adopting a postpositivist paradigm, the research seeks to answer the overarching question: How do SMEs in emerging markets leverage EO to enhance their EP? The thesis is divided into three manuscripts. The primary focus of the study is on the EO–EP relationship, where EO is a widely recognised yet multifaceted construct that is often defined and measured inconsistently. To address this issue, the first manuscript of the thesis aims to clarify the construct of EO and provide a more consistent framework for its measurement. The second manuscript addresses the research questions: How does each dimension of EO individually and collectively impact the EP of SMEs in emerging markets? and how do SMEs simultaneously utilise different exploratory and exploitative types of learning (experiential and vicarious) and networking activities (formal and informal) to enhance EO and improve their EP? Building on two key theories—ambidexterity theory and the resource-based view—the second manuscript examines how the various dimensions of EO (innovativeness, risk-taking, proactiveness, competitive aggressiveness, and autonomy) contribute to EP. It argues that not all dimensions need to be maximised equally for SMEs in emerging markets. Furthermore, the manuscript introduces a novel theoretical framework, emphasising the need to balance both explorative and exploitative learning and networking activities. This framework links EO, experiential and vicarious learning, and formal and informal networking with EP, while empirically validating the model. The results found that proactiveness is the most critical EO dimension for EP, while innovativeness and risk-taking are the least significant in the context of resource-constrained emerging markets. Collectively, EO has a positive impact on EP. Further, both experiential and vicarious learning significantly mediate the EO–EP link. While only formal networking plays a crucial mediating role, informal networking does not significantly influence EP in this context. The third manuscript focuses on addressing the research question: How does the absorptive capacity of a firm, including both potential and realised absorptive capacities, strengthen the learning processes of SMEs and contribute to improved EP? It discusses the specific impact of vicarious learning, arguing that SMEs in emerging markets can significantly benefit from learning through the experiences of others. It further highlights the critical role of a firm's absorptive capacity in effectively internalising and applying this socially acquired knowledge, enhancing its ability to improve EP. The results confirm that vicarious learning mediates the EO–EP relationship, with the process being conditioned by both potential and realised absorptive capacities affirming that firms with higher absorptive capacities are better able to convert knowledge gained from others into actionable strategies, thereby enhancing EP. This research makes several significant contributions to the field of international entrepreneurship, particularly concerning SMEs in emerging markets. This study contributes to the theoretical debate between Miller's (1983) unidimensional conceptualisation and Lumpkin and Dess' (1996) multidimensional conceptualisation of EO, providing empirical evidence that supports the multidimensional perspective. It advances the understanding of the individual dimensions of EO, clarifying the optimal levels to be maintained within the context of emerging markets. The research theorises and empirically validates the importance of explorative and exploitative learning and networking activities for successful internationalisation, proposing a novel framework while also offering context-specific insights that challenge the assumption of the universal applicability of EO constructs. Finally, by integrating social learning theory and the knowledge-based view of the firm, this study developed and empirically validated a framework to understand how EO drives EP through vicarious learning, thus highlighting the importance of developing the firm's absorptive capacities.
Type
Thesis
Series
Citation
Date
2024
Publisher
The University of Waikato
Rights
All items in Research Commons are provided for private study and research purposes and are protected by copyright with all rights reserved unless otherwise indicated.