Performance of Russian SMEs: exploration, exploitation and strategic entrepreneurship

Abstract

Purpose

The purpose of this paper is to examine the ability of Russian firms to develop strategic entrepreneurship (SE) as a source of sustainable competitive advantage in a turbulent and hostile business environment. It aims to suggest a model of SE that includes two components – exploration and exploitation – and to test this model on 500 Russian small to medium‐sized enterprises (SMEs) which show the influence of these components on firm performance. It also aims to address one of the most fundamental questions confronting the international business (IB) field: “What determines the success and failure of firms around the world?”.

Design/methodology/approach

The paper presents empirical research with a regression analysis of 500 Russian SMEs operating in Moscow and St Petersburg in three major industries: information technologies and communications (ICT), hotels, restaurants, and cafes (HoReCa) and wholesale/retail.

Findings

The Russian firms show a positive influence of exploration and exploitation on firm performance. Moreover, the influence of specific elements of exploration and exploitation was analyzed and entrepreneurial values, investments in internal resources, knowledge management and developmental changes were determined to be significant factors constituting SE and having a positive relationship with firm performance.

Research limitations/implications

The research is limited by its sample, which includes only three industries and the number of dependent variables tested. Further research can focus on other performance indicators, industries and different settings.

Originality/value

The paper contributes to the existing literature on entrepreneurship and IB in two ways. The theoretical contribution in entrepreneurship literature is linked to development and testing of the SE model. It also contributes to IB literature by proposing that SE is one of the possible sources for creating a successful firm in an emerging economy context such as in Russia.

Citation

Shirokova, G., Vega, G. and Sokolova, L. (2013), "Performance of Russian SMEs: exploration, exploitation and strategic entrepreneurship", Critical Perspectives on International Business, Vol. 9 No. 1/2, pp. 173-203. https://doi.org/10.1108/17422041311299941