The use of exploration and exploitation strategies for internationalization by old and new economy SMEs

The focus of this exploratory study is on the international organizational renewal strategies of small- and medium sized enterprises (SMEs). We are interested particularly in whether firms’ actions of internationalization are of an explorative or exploitative nature and whether firms’ use of exploration and exploitation
actions evolves over time. We examine the impact of firm and industry characteristics and focus on the relationship between explorative and exploitative
behavior and the level of integration of the firm’s international activities (autonomous vs. co-operative strategies). We include two sectors: an ‘old economy’ sector (i.e. mechanical engineering) and a ‘new economy’ sector (i.e.
software production). Our study shows that conceptual development in this area
needs further improvement. Empirical findings indicate that industry is indeed a major determinant of the use of renewal strategies by SMEs.