Proactive market orientation towards export performance within SMEs: a comparative study between the US and South Korea

Abstract

Drawing on dynamic capabilities (DC) theory, this paper examines the relationships between proactive market orientation (PMO) that captures new knowledge or information for a business market and export performance through exploration innovation (i.e. radical innovation) (EOR) and exploitation innovation (EOI) (i.e. incremental innovation) in small and medium-sized enterprises (SMEs) in both the United States (US) and South Korea. As a quantitative research, data sets in each country were collected employing a non-probability sampling approach. For theoretical extension and identifying a crucial construct for export performance, partial least squares structural equation modelling (PLS-SEM) is employed, including multi-group analysis (MGA). This paper has demonstrated that PMO can influence export performance through EOR in combined data, including the US and South Korea. While PMO can affect export performance through EOR in the US, PMO cannot lead to export performance through either EOR or EOI in South Korea. For better export performance, this research proposes that SMEs in the US should keep re-shaping digital business models for EOR attributed to PMO. However, due to reliance on venture capital, both EOR and EOI should be pursued simultaneously for long-term export performance. In contrast, SMEs in South Korea should facilitate business process innovation (i.e. innovating firms) first to enhance export performance.