Learning by exporting and innovation performance: evidence from Thai SMEs

Abstract

This study aims to analyze the crucial mediating role of tacit knowledge acquisition from foreign markets between the effect of sub-dimensions of export activities and the innovation performance of small and medium-sized enterprises (SMEs) in Thailand. The primary purpose is to demonstrate that a Learning-by-Exporting (LBE) concept cannot always enhance SMEs' innovation performance directly, and their relationship is not always linear. Contributing to the LBE literature, the study uses the Knowledge-Based View (KBV) to emphasize a driving mechanism that explains why the LBE concept may not always lead to a firm's innovation performance directly, together with discussing current issues related to the mixed results of LBE effects on innovation performance. Involving 220 Thai Manufacturing SMEs and using structural equation model, the results indicate that tacit knowledge acquisition mediates the relationship between export intensity and process innovation, not product innovation. Besides, the study suggests that the sub-dimensions of export activities are significant factors to reconcile the inconclusive effects between export and innovation performance. Each dimension is also found to provide different significant results on the firm's tacit knowledge acquisition; for instance, while export intensity positively impacts tacit knowledge acquisition, the number of markets negatively affects it. Furthermore, whereas the results of multigroup path analysis for young and mature firms do not support the model-level, a significantly positive impact of the numbers of customers on mature firms’ tacit knowledge acquisition is observed at the path-level, and the direct effect of the number of markets on young firms’ product innovation is noted. The findings of this study shed new light on the LBE literature in the SMEs context by proposing a scrutiny of the ages of firms in further LBE research.