The Effect of Relational Embeddedness, Absorptive Capacity, and Learning Orientation on SMEs’ Competitive Advantage

Abstract

The combination of external new knowledge and organizational capability has become a cornerstone in the internationalized enterprises. Sources of knowledge acquisition are among the most valuable resources that an internationalized firm can achieve competitive advantage. This study aims to explore this phenomenon between knowledge sources and competitive advantage in the context of internationalized small and medium enterprises (SMEs) mainly by a quantitative approach. Based on contextual nature of resource–capability–competitive, absorptive capacity has long been a critical construct in organizational studies, as well as referring relational embeddedness as potential drivers of absorptive capacity, which is moderated by learning orientation. This study also investigates the mediating effect of absorptive capacity in terms of knowledge absorption and integration on international competitive advantage. To gain insights and provide essential implications for internationalized SMEs from the global economy, this study adopted purposive sampling to collect 211 valid responses. Via the partial least-squares structural modeling, the relationships among relational embeddedness, potential and realized absorptive capacity, and competitive advantage were measured. The results suggest that relational embeddedness positively influences potential and realized absorptive capacity with moderating effect of learning orientation. Potential and realized absorptive capacities have full mediating effect between relational embeddedness and competitive advantage. This study concludes insights and implications for research and practice.

How Do the Determinants of New Product Development Matter in the International Context? The Moderating Role of Learning Orientation

“…In conclusion, external knowledge is acquired, converted and utilized by internationalized enterprises based on RE (Alinaghian et al, 2020). External and internal knowledge can be combined, and international exploration can be strengthened in the process of organizational learning (García-Villaverde et al, 2018; Wu et al, 2020). Therefore, here is the following hypothesis made in the study: H3: Relational embeddedness positively correlates with international exploration.…”

“…al., 2018;Wu et al, 2020). Moreover, following and extending prior organizational learning studies, the current study provides an integrated theoretical model which has not yet been identified or verified in the literature.…”

“…Following the claims from Dhanaraj et al ( 2004) that information and knowledge could be exchanged by organizations through means of market, hierarchy and a hybrid form. The international joint venture is a typical example concerning a hybrid form, and they elaborate on the relationships among organizations with three factors in RE, namely, the strength of ties, trust and shared system (Liu et al, 2018;Wu et al, 2020).…”

“…At the same time, these boundaries can be broken through by the embedded social relationship (Chung, 2012). RE can conquer the obstacles and contribute to the cost reduction of knowledge acquisition in the process, in which free exchange of knowledge that has been created resulting in learning facilitation (Luca et al, 2018;Wu et al, 2020). Knowledge transfer will be obstructed by them when there is high complexity in the knowledge, and it is explicit to be made ( Hence, equipped with good RE, internationalized enterprises are capable of comparing their current knowledge with new network knowledge (Evangelista & Hau, 2009;Flor et al, 2018); based on successive, repeated reflections, the content and quality of the knowledge can be obtained by such enterprises (Alinaghian et al, 2020), and problems can be figured out by them, together with their relevant customers and suppliers (Luca et al, 2018), consequently, their tacit knowledge is obtained (Luca et al, 2018).…”

“…Cadogan et al, 2009;Gomes & Wojahn, 2017;Wu et al, 2020). Specifically, this study makes the following contributions.…”