Microfoundations of network exploration and exploitation capabilities in international opportunity recognition

Anisur Faroque*, Sussie Morrish, Olli Kuivalainen, Sanna Sundqvist, Lasse Torkkeli

*Corresponding author for this work

Research output: Contribution to journalArticleScientificpeer-review

Abstract

While international entrepreneurship (IE) recognizes opportunity recognition (OR) as a central activity and the prominent role of network capabilities in OR, it is not informative as to how different network capabilities influence OR in international markets. We utilize dual network capability through the lens of exploration-exploitation to better understand how these two different capabilities influence the identification of international opportunities. Given that microfoundations perspective and prior experience in IE are under-developed and under-theorized, we explore founder’s prior experience as an essential microfoundation for the dual network capability. By employing structural equation modeling on a sample of 647 early internationalizing firms from a developing country, the study demonstrates that founders’ prior experience is a significant microfoundation of dual network capability in international OR. However, both exploration and exploitation capabilities fail to bring new opportunities in a changing market environment. A post-hoc analysis reveals that at a higher level of market change, younger firms benefit more from network exploration, whereas older firms achieve greater success when leveraging benefits from network exploitation. The study concludes with implications and future research avenues.
Original languageEnglish
Article number101767
Number of pages15
JournalInternational Business Review
Volume30
Issue number1
Early online date3 Nov 2020
DOIs
Publication statusPublished - Feb 2021
MoE publication typeA1 Journal article-refereed

Keywords

  • Network exploration
  • Network exploitation
  • Market change
  • Microfoundations International opportunity recognition

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