The Importance of Strategic Fit between Host–Home Country Similarity and Exploration Exploitation Strategies on Small and Medium-Sized Enterprises’ Performance: A Contingency Perspective
Restricted accessResearch articleFirst published online December, 2014
The Importance of Strategic Fit between Host–Home Country Similarity and Exploration Exploitation Strategies on Small and Medium-Sized Enterprises’ Performance: A Contingency Perspective
The impact of host–home country similarity on firm performance has long been debated in the international marketing literature with inconclusive, if not contradictory, findings. Taking a contingency perspective, this study proposes that a small or medium-sized enterprise's (SME's) global market performance depends on the strategic fit between its exploration and exploitation strategies and its host country choice. The results of a survey of chief executive officers and senior international marketing managers of SMEs in the United States show that the impact of host–home country similarity on SMEs’ international performance is moderated by their choice of exploration and exploitation strategies. Specifically, host–home country similarity has a positive impact on an SME's international performance when the firm adopts an exploitation strategy. Conversely, host–home country similarity has a negative impact on an SME's international performance when it adopts an exploration strategy. Directly addressing the long-standing host–home country similarity debate in the international marketing literature, this study sheds additional light on the drivers for SMEs’ internationalization success.
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