Firm Exporting and Investment in Exploratory and Exploitative R&D

Purpose – This study investigates how firms’ internationalization activities through exporting influence their organizational learning. Specifically, we examine 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 7055 firms in Spain during the period 2006 to 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. We extend this knowledge by showing that different aspects of exporting, specifically, the level of exporting and geographic market scope, drive different types of organizational learning.