Linking inward/outward FDI and exploitation/exploration strategies:Development of a framework for SMEs

Kang, Y. and Scott-Kennel, J. and Battisti, M. and Deakins, D. (2020) Linking inward/outward FDI and exploitation/exploration strategies:Development of a framework for SMEs. International Business Review. ISSN 0969-5931

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Abstract

The purpose of this paper is to examine the relationships between exploitation/exploration strategy and foreign direct investment (FDI) involving small and medium-sized enterprises (SMEs). Drawing on qualitative data collected from 45 FDI projects reported by 38 SMEs in a small open economy (SMOPEC), we develop an empirically grounded framework and research propositions that suggest inward FDI (into the SME) is associated with exploration driven by a strategic asset-seeking motive, and outward FDI (by the SME) is associated with exploitation driven by market and efficiency-seeking motives. Further, for the SMEs in this study, ambidextrous exploration and exploitation appear complementary and co-occur either simultaneously through an inward FDI project, or sequentially through separate inward and outward FDI projects, respectively. Our findings, however, reveal a lack of clear sequencing between inward and outward FDI, in contrast to previous research that has conceptualised inward FDI as a strategic means to achieve outward FDI. Implications for theory, practice and policy are discussed.

Item Type:
Journal Article
Journal or Publication Title:
International Business Review
Additional Information:
This is the author’s version of a work that was accepted for publication in International Business Review. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in International Business Review, ?, ?, 2021 DOI: 10.1016/j.ibusrev.2020.101790
Uncontrolled Keywords:
/dk/atira/pure/subjectarea/asjc/1400/1406
Subjects:
ID Code:
151872
Deposited By:
Deposited On:
18 Feb 2021 11:45
Refereed?:
Yes
Published?:
Published
Last Modified:
18 Feb 2021 11:45