What drives exploration? Convergence and divergence of exploration tendencies among alliance partners and competitors

Geert Duysters, Dovev Lavie, Anna Sabidussi, Uriel Stettner

Research output: Contribution to journalArticlepeer-review

31 Scopus citations

Abstract

Management research has alluded to organizational and environmental conditions that drive firms’ tendencies to explore versus exploit. We complement this research by developing theory on vicarious learning to explain how a firm adjusts its own exploration level based on the exploration levels of its alliance partners and competitors. Using panel data on 180 electronics firms publicly traded in the United States, we reveal an inverted U-shaped association between a firm’s exploration tendency and the exploration levels of its partners and competitors. Convergence is explained by imitation and legitimation, while divergence is associated with risk perception and specialization in the knowledge domain. We further show how the convergence of the exploration tendency becomes stronger under firm-specific uncertainty but weaker when the exploration patterns exhibited by the firm’s partners and competitors are incoherent. Finally, counter to expectations, we show that this convergence is weakened by the technological proximity of the firm’s competitors. Our findings inform research on vicarious learning and the antecedents of exploration by underscoring the role of interdependence in firms’ exploration tendencies.

Original languageEnglish
Pages (from-to)1425-1454
Number of pages30
JournalAcademy of Management Journal
Volume63
Issue number5
DOIs
StatePublished - Oct 2020

Funding

FundersFunder number
Coller Foundation
Eli Hurvitz Institute for Strategic Management
Università Bocconi

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