Firm exporting and investment in exploratory and exploitative R&D

Abstract

Purpose This study aims to investigate how firms’ internationalization activities through exporting influence their organizational learning. Specifically, this study examines how the level of exporting and geographic market scope impact a firm’s exploratory and exploitative R&D investment differently. Design/methodology/approach Using a sample of 7,055 firms in Spain during the period 2006–2011, the study uses regression analysis (generalized least squares random effects) to test various hypotheses. Findings Although exporting improves organizational learning, learning opportunities vary for different aspects of exporting. Specifically, the level of a firm’s exporting has a significant positive effect on its exploitative R&D investment, whereas geographic market scope of a firm increases its exploratory R&D investment. Practical implications The findings can aid in shaping policies and firms’ decisions pertaining to exporting and exploratory and exploitative R&D investment. As the findings indicate that, the determinants of exploratory and exploitative R&D investment are different, managers and policymakers, who aim at a specific type of R&D investment, should understand which exporting strategy they should pursue. Originality/value Prior research suggests that exporting improves organizational learning. This study extends this knowledge by showing that different aspects of exporting, specifically, the level of exporting and geographic market scope, drive different types of organizational learning.