The trade-off between international exploration and exploitation: potential recipes for the short term international growth

Abstract

SMEs currently require a quick growth in international markets and a rational decision-making depending upon the context of the decision on internationalization. In this framework, we study two complementary but exclusive alternatives –to allocate resources to international exploration and exploitation– and their association to international growth of foreign sales to total sales in the short-term under a cognitive approach. Our study reveals that a higher orientation to international exploitation associates positively to that growth. Conversely, a higher orientation to international exploration associates negatively to it. We suggest some recommendations for speeding up international growth of sales based on these results.