Abstract

Internationalization is important for the survival and success of entrepreneurial firms. Although several empirical studies have linked internationalization to the performance of entrepreneurial firms (e.g., Bloodgood et al. 1996; Qian & Li, 2003), little attention has been given to the performance consequences of different internationalization processes. In this paper, we apply ambidexterity, a concept mainly used in innovation research, to study internationalization processes of entrepreneurial firms. Ambidexterity is defined as the ability of firms to perform alignment and adapting tasks at the same time (Tushman & O’Reilly, 1996). We propose that firms which seek to both explore and exploit international markets perform better than firms with no or focused international activities. The coordination of exploration and exploitation activities in international markets requires knowledge-based resources within the firm. High absorptive capacity as the capability to assimilate and apply knowledge (Cohen & Levinthal, 1990; Zahra & George, 2002) increases a firm’s opportunities to generate value from internationalization. Absorptive capacity may, therefore, have a crucial influence on the relationship between internationalization ambidexterity and firm performance.

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