Microfoundations of network exploration and exploitation capabilities in international opportunity recognition

While international entrepreneurship (IE) recognizes opportunity recognition (OR) as a central activity and the prominent role of network capabilities in OR, it is not informative as to how different network capabilities influence OR in international markets. We utilize dual network capability through the lens of explorationexploitation to better understand how these two different capabilities influence the identification of international opportunities. Given that micmfoundations perspective and prior experience in IE are under-developed and under-theorized, we explore founder's prior experience as an essential micmfoundation for the dual network capability. By employing structural equation modeling on a sample of 647 early internationalizing firms from a developing country, the study demonstrates that founders' prior experience is a significant microfoundation of dual network capability in international OR. However, both exploration and exploitation capabilities fail to bring new opportunities in a changing market environment. A post-hoc analysis reveals that at a higher level of market change, younger firms benefit more from network exploration, whereas older firms achieve greater success when leveraging benefits from network exploitation. The study concludes with implications and future research avenues.

Automated summary

This study explores how founder's prior experience influences international opportunity recognition through the lens of dual network capability, finding that exploration and exploitation capabilities have different impacts on identifying opportunities in changing market environments. Additionally, the analysis shows that younger firms benefit more from network exploration in higher levels of market change, while older firms achieve greater success through network exploitation.