Exploring the role of knowledge management practices on ... - Index of

International Business Review 23 (2014) 38–44

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Exploring the role of knowledge management practices on exports: A dynamic capabilities view Cristina Villar *, Joaquı´n Alegre, Jose´ Pla-Barber University of Valencia, Spain

A R T I C L E I N F O

A B S T R A C T

Article history: Received 30 October 2012 Received in revised form 30 July 2013 Accepted 8 August 2013

Drawing on dynamic capabilities view, this work provides empirical evidence on the role of knowledge management practices on export intensity in SMEs in a mature and global, non-high-tech industry. A quantitative study with structural equation modeling was carried out on a sample of 157 Spanish and Italian manufacturing companies in the ceramic tile industry. Our results suggest the existence of a mediating effect of dynamic capabilities on exports, hence the implementation of knowledge management practices is a necessary but not sufficient condition to improve exporting, requiring the existence of dynamic capabilities to reconfigure these capabilities. Findings highlight the relevance of knowledge practices to foster exports, providing new insights for managers dealing with dynamic capabilities in SMEs. ß 2013 Published by Elsevier Ltd.

Keywords: Knowledge management practices Dynamic capabilities Exports

1. Introduction Knowledge management and learning processes have become a major factor for achieving long-term competitive advantage and for international success. In the export market literature, market knowledge management is considered to facilitate the achievement of higher performance and efficient responses to customers’ needs and requirements (Cadogan, Diamantopolous, & Siguaw, 2002; Feng, Sun, & Zhang, 2010). Under turbulent market conditions, exporting firms moving away from existing knowledge bases and seizing for new market knowledge and opportunities are more capable to identify new trends and enter new markets successfully (Hughes, Hughes, Martin, Morgan, & Robson, 2010; Kudsen & Madsen, 2002; Lisboa, Skarmeas, & Lages, 2013; Morgan, Katsikeas, & Vorhies, 2012). Dynamic capabilities help to deal with rapidly changing environments, considering the evolving nature of firms’ resources and capabilities to adapt to changes in their environment (Lavie, 2006; Teece, Pisano, & Shuen, 1997; Tushman & O’Reilly, 1996). While there is a general consensus on the theoretical importance of dynamic capabilities in this landscape, this arises several challenges for firms, especially for small and medium enterprises (SMEs), affected by the lack of resources to compete in areas such as marketing, production, innovation and international strategy. Dynamic capabilities in internationalization have been * Corresponding author at: University of Valencia, Department of Management, Faculty of Economics, Avenida Tarongers, s/n 46022 Valencia, Spain. Tel.: +34 963828750; fax: +34 963828333. E-mail address: [email protected] (C. Villar). 0969-5931/$ – see front matter ß 2013 Published by Elsevier Ltd. http://dx.doi.org/10.1016/j.ibusrev.2013.08.008

recently addressed by scholars since the foundation of the international ambidexterity literature (Hsu, Lien, & Chen, 2013; Luo, 2002; Luo & Rui, 2009; Prange & Verdier, 2011). Even so, little is known about the potential impact of knowledge management systems on one of the most popular entry modes. This is particularly noticeable in some specific contexts: whereas recent works (for instance, Hsu et al., 2013; Keen & Wu, 2011; Luo & Rui, 2009) analyzed its role within the context of foreign direct investment (FDI) from emerging countries, we still lack empirical research on knowledge management capabilities in the context of export strategy. In practice, the first real step in SMEs’ internationalization process usually consists in exporting (Jones, 2001). Exporting entails operating in a market characterized by geographic and psychic distance, in which firms need to deal with new competitive rules in a different cultural, economic or political environment: distribution channels, local rivalry and businesses practices, customer tastes or legal aspects are among the main hitches they have to face. As export activity also generates advantages for the learning process of the company (Crespi, Criscuolo, & Haskel, 2008), developing practices to codify, storage and use basic and specific knowledge on foreign markets therefore becomes a first order task. Indeed, in spite of its importance for sustainable competitiveness, in most SMEs there is an absence of systematic knowledge management (Wong & Aspinwall, 2005). Yet, the existence of a knowledge management structure is not a sufficient condition for sustainable value creation. Current research aiming to enhance SMEs’ international competitiveness should then respond to the practical question of which knowledge practices can be implemented to increase export performance.

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Our interest is on the study of knowledge management processes of those SMEs mainly internationalized through export ventures. We formulate our theoretical framework basing on Alegre, Sengupta, and Lapiedra (2011) conceptualization of knowledge management practices, adapted to the export view. We analyze knowledge management by using a series of Knowledge Management Practices and Knowledge Management Dynamic Capabilities that might impact on export intensity. We depict the effect of knowledge management dynamic capabilities in practice for international companies from two leading countries competing in a global and fragmented industry: Italian and Spanish ceramic tile producers. In this context where firms need to constantly reconfigurate their knowledge stock about foreign customers and institutions possibilities to grow are highly limited, so we attempt to offer guidance on knowledge management to enhance export activity. International firms operating in these types of industries should then create an ambidextrous structure (i.e., exploration and exploitation processes) to use their current capabilities while also searching for new resources (Levinthal & March, 1993; Tushman & O’Reilly, 1996). We provide three main contributions to the literature: (1) we offer empirical evidence regarding knowledge management practices in a mature, medium knowledge-intensive industry. Studying knowledge management still presents a significant challenge, since it is necessary to properly define its scope and operationalization. We postulate a wider perspective by applying knowledge management constructs to analyze the role of knowledge dynamic capabilities; (2) we apply the international ambidexterity framework to the case of exporting companies, a stream of research that has largely focused in FDI; (3) in contrast to recent literature on exports from dynamic capabilities view (for instance, Morgan, Katsikeas, & Vorhies, 2012), by using a second order construct for knowledge management we can better untangle their components and key issues in order to improve export performance. We measure second order capabilities, thus overcoming some of the limitations of secondary data studies addressing dynamic capabilities. Moreover, we focus our study in the context of SMEs, a field where research on knowledge management is still fragmented and quite limited (Durst & Edvardsson, 2012; Wong & Aspinwall, 2005). This paper is structured as follows: we first review the theoretical background focusing on knowledge management processes and dynamic capabilities in the context of exports. We then develop our research model and hypotheses and provide empirical results from our quantitative study. Finally, we discuss these findings and the implications for both academics and managers in SMEs.

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2. Theoretical background Resource-based view (RBV) and Knowledge-based View (KBV) have been widely used to explain the internationalization of businesses, especially in the context of exports (Dhanaraj & Beamish, 2003; Katsikeas, Leonidou, & Morgan, 2000). By considering organizations as a set of tangible and intangible unique resources, RBV tries to explain why an organization can outperform others (Barney, 1991), whereas KBV focuses on knowledge as the most valuable resource in the company (Grant, 1996). Yet, the static approach of this perspective prompted it to evolve into a more dynamic view. Dynamic capabilities View (DCV) complements the findings on export behavior research, as it can embrace export performance as well as internationalization processes (Kudsen & Madsen, 2002). Knowledge is the central element in the learning process, which consists of the acquisition, integration and exploitation of knowledge (Cohen & Levinthal, 1990). Knowledge management is essentially the creation and application of knowledge as a resource (Grant, 1996), whilst learning is a process of acquisition, assimilation, and exploitation of this knowledge (Cohen & Levinthal, 1990). In this sense, we can identify two intermediate stages between organizational learning capability and organizational performance: (a) knowledge management processes and organizational learning as the output and (b) dynamic capabilities. Our model analyses these dimensions in the context of exports (Fig. 1) Knowledge management systems support the creation, transfer and application of knowledge in organizations (Alavi & Leidner, 2001). Knowledge management systems collect these abilities and the know-how sustaining the foundations of distinctive activities (Alavi & Leidner, 2001). Therefore, Knowledge Management Practices (KMP) are considered organizational routines (Nelson & Winter, 1982) oriented towards its exploitation. In short, efficient KMP deals with the application of knowledge: it facilitates the development of routines and capabilities, given that even if a firm can afford different resources, effective KMP will be needed to better exploit them. Alegre et al. (2011) consider two main KMP: knowledge dissemination and storage practices. The former deals with the application, while the latter entails the systems to retrieve relevant knowledge in the organization. Knowledge Dissemination Practices (KDP) includes those processes that enable the application of knowledge through formal and informal channels (Zahra & George, 2002). This valuable knowledge is then distributed both inside and outside the firm. These include systems to codify tacit into explicit knowledge, as in many cases, ineffective knowledge transfer arises

[(Fig._1)TD$IG]

Fig. 1. Conceptual model.

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from problems in encoding knowledge. Information distribution systems for employees, customers and suppliers are included (Alavi & Leidner, 2001). It comprises as well as techniques to foster employees’ motivation to share knowledge and participation through quality circles or multidisciplinary teams (Alavi & Leidner, 2001; Nonaka & Tackeuchi, 1995). Indeed, the existence of internal knowledge structures is particularly relevant, as in SMEs external communication channels are more frequently used than internal (Durst & Edvardsson, 2012). Knowledge Storage Practices (KSP) are information-based systems developed to support the processes of operational knowledge retrieval and storage (Alavi & Leidner, 2001): global gathering and information processing systems, control and revision procedures, and systems allowing the use of the stock of knowledge created. This structure allows gathering and transforming the relevant information and applying it for further operations, providing with a valuable feedback. Many times knowledge is retained at the individual level, mostly in a reduced number of managers, so the creation of a formal structure for knowledge storage is an important challenge for SMEs (Wong & Aspinwall, 2005). The underpinning idea under the creation of knowledge management practices is consistent with export marketing capabilities, in which firms use routines to gather, process and interpret export market information, as well as they distribute relevant information to export decision makers (Morgan et al., 2012). As market knowledge becomes obsolete very quickly, foreign market growth depends on the potential to organize capabilities, laying the foundation for continuous learning in order to attain its potential value (Grant, 1996). The role of firm knowledge in the development of international activity has been widely quoted (Johanson & Vahlne, 1977, 1990). In the last 30 years, an important stream of literature on export performance has mainly pointed at structural factors of the company, management team, incentives or obstacles to the internationalization process (Leonidou, Katsikeas, Palihawadana, & Spyropoulou, 2007; Sousa, Martı´nez-Lo´pez, & Coelho, 2008), though this literature has not established a strong basis on the specific role of knowledge management. One of the most cited variables is managerial commitment, which highly determines the proactivity to seek for market opportunities (Cavusgil & Zou, 1994). While it is true that in many SMEs there is an absence of systematic knowledge management, this does not imply that knowledge management is less important than for large companies; indeed, it can be argued that this is a distinctive factor for SMEs’ survival (Durst & Edvardsson, 2012). An important implication is that managers should foster organizational learning and create a structure to support these configurations (Hsu et al., 2013). Hence, knowledge management practices are confined to managers’ attitude to foster learning and improvement within the firm. This is a particularly relevant issue for SMEs, where decisions on international strategy usually are due on a person or a reduced management team (Ferna´ndez & Nieto, 2005). Under complex market conditions, the accurate implementation of certain organizational practices related to market knowledge might be helpful to explain heterogeneous levels of performance in export strategy. Therefore, it is expected that having a formal knowledge management structure (in the form of KMP) may impact positively on export intensity, so we propose the following hypothesis: H1. Knowledge Management Practices (KMP) have a positive effect on Export Intensity (EXP). However, the adoption of KMP which basically take action in routine operations does not necessarily imply that such practices might be appropriate in the future, therefore it does not have a positive impact on firm performance per se. Organizations are

considered entities capable to generate dynamic capabilities, which are strongly rooted in routines and organizational processes and conditioned by their history (Easterby-Smith & Prieto, 2008; Tushman & O’Reilly, 1996). Dynamic capabilities are those that can generate second order capabilities, becoming the real channel to help firms to systematically generate and modify its operating routines to improve efficiency (Teece et al., 1997; Zollo & Winter, 2002). Since the creation of dynamic capabilities requires the accumulation, articulation and codification of knowledge, knowledge management and dynamic capabilities are strongly related concepts (Zollo & Winter, 2002), as knowledge management processes drive the development, evolution and use of these capabilities (Eisenhardt & Martin, 2000). Knowledge management processes are then reinforced from the existence of dynamic capabilities which allow the company to make changes in their current practices preventing them from becoming rigidities (Easterby-Smith & Prieto, 2008; Eisenhardt & Martin, 2000). Specific learning processes lead to the development of dynamic capabilities (Kogut & Zander, 1992). Dynamic capabilities are critical for a company to balance international exploitation and exploration in practice, and different structures are needed for its development. Basically, exploration refers to the deployment of the existing knowledge on markets, products and abilities, whereas exploration implies the development of new knowledge in these areas (Levinthal & March, 1993). Through exploitation the firm consolidates knowledge and prepares it for future use, yet an extensive focus in the exploitation of organizational routines might lead firms to strategic myopia (Levinthal & March, 1993). Companies can achieve new combinations of knowledge internal from both internal (Lavie, 2006) and external sources (Zahra & George, 2002; Lavie, 2006), which are mainly related to exploitation and exploration, respectively. Nonetheless, some academics suggest that explorative learning, as double-loop learning, can be originated as well from internal sources, because new knowledge combinations can also arise as a result of the learning process inside the firm (Kogut & Zander, 1992). Indeed, when a firm has been operating in a mature industry for long, exploitation becomes highly relevant to maintain competitive positions, as these firms have usually a strong organizational basis in terms of resources and capabilities. In this situation, successful exploitation requires an efficient and effective process to increase and extend the usage of existing internal assets (Hsu et al., 2013). Building on basic systems, knowledge management dynamic capabilities are configured as the formula to achieve a constant fit of these resources; in other words, the hub through which the organization can adapt their skills to the changing foreign environment. We base on the framework by Alegre et al. (2011) to propose two dimensions of KMDC: Internal Knowledge Development and External Knowledge Integration, which support the exploration of new knowledge in the organization, from both internal and external sources. Internal Knowledge Development (IKD) involves the creation and dissemination of new knowledge within the firm, requiring the existence of a previous exploitation process. It requires abilities to organize resources for exporting, such as qualified personnel coordinating organizational processes with the rest of areas, as well as the capability to be positioned in the technological front line and the capability to manage innovative efforts. This accumulation of internal knowledge is crucial for value creation, as it enhances the ability to exploit new opportunities outside the firm through the existence of prior knowledge as a requirement for the existence of absorptive capacity (Cohen & Levinthal, 1990). External Knowledge Integration (EKI) enables the creation of a broader knowledge base through exploration outside firm boundaries. This process helps the firm to recombine their current knowledge with new knowledge from their environment into new knowledge and capabilities, offering a global perspective on the

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competition basis in foreign countries regarding customers or competitors’ actions. It includes the ability to enhance knowledge through cooperation, as well as the acquisition of technology; the role of industry associations or public entities is here noteworthy, as they are especially helpful in supporting the competitiveness and collaboration of firms in industries with low technological inputs or fewer resources. Due to resource constraints, SMEs are particularly required to absorb knowledge from external sources (Durst & Edvardsson, 2012), as an expression of an explorative behavior. In the context of internationalization, by introducing the notion of international ambidexterity, Prange and Verdier (2011) proposed different types of dynamic capabilities supporting different internationalization processes, though literature points at the importance of combining those capabilities. With some recent exceptions (Lisboa et al., 2013; Morgan, Katsikeas, & Vorhies, 2012) and despite the importance of these internal and external dimensions for knowledge development, few studies have addressed their joint effect on export ventures in this context. In fact, most research on ambidexterity has been developed in domestic markets or FDI in the case of international ambidexterity, while recent works are starting to depict the importance of both exploitation and exploration for exporting firms (Hughes et al., 2010; Lisboa et al., 2013). Initial steps in foreign markets generally involve explorative efforts into different institutional, sociocultural and economic contexts, where export managers have no experiential knowledge and do not perceive how different the target market is from the home market (Prime, Obadia, & Vida, 2009). Once the firm is in the habit of foreign operations, exploitative learning is path-dependent on the knowledge accumulation that comes from the international experience, and explorative internationalization deals with the ability of a firm to achieve new forms of knowledge. Building on DCV, Kudsen and Madsen (2002) also consider that the initiation or continuation of an export venture may be justified by changes in capabilities of the firm. i.e., informational architecture and absorptive capacity; therefore, an export venture always implies exploration. Also, although explorative skills are extremely important to develop new products or markets aside from path-dependency, dynamic capabilities are considered to have a synergistic effect over each individual capability type (Eisenhardt & Martin, 2000). Hence, if knowledge systems act as a basis on which to count in order to gain new skills, technologies and methods for effective and efficient learning, we expect that knowledge management dynamic capabilities can be the link that might aid SMEs to reconfigure their knowledge basis on export ventures, enhancing export intensity in the firm. Consequently, we propose the following mediating hypothesis: H2. The positive effect of Knowledge Management Practices (KMP) on Export Intensity (EXP) is mediated by Knowledge Management Dynamic Capabilities (KMDC).

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3. Methodology Our model was tested with data from Spanish and Italian ceramic tile manufacturers. Together with Italy, Spanish ceramic tile industry account for most of the European production, and are the second and third world producers with over a 70% of the global market share. Spanish and Italian ceramic tile sector have similar characteristics. They are geographically concentrated in industrial districts, mainly located in Sassuolo (Italy) and Castellon (Spain). Their activity is strongly supported by public institutions such as the ITC (Instituto Tecnolo´gico de la Cera´mica, in Castello´n) or Bologna Ceramics Center. Most firms within these industrial districts are medium-sized, not exceeding 250 employees. This industry presents some uniqueness that makes it particularly suitable for our purpose. Although these companies certainly may have structural weaknesses, ceramic industry is highly globalized and these firms show an intense export growth thanks to their leadership in design and technology. With a medium technological level, the design of production systems in this sector is needed to sustain technology and knowledge accumulation; hence, communication channels and inter-firm networks are particularly needed for knowledge transmission and its utilization (Villar, Pla-Barber, & Alegre, 2012). The development of one sector analysis particularly adapts to this study as it facilitates the identification and measurement of critical resources in an industry (Hitt, Bierman, Shimizu, & Kochhar, 2001). Furthermore, knowledge management processes can vary considerably between industries, so the consideration of a single sector under study enables a more accurate approximation to the reality of this industry. Field work was carried out through a 7-point Likert scale questionnaire, sent from June to November 2004. The questionnaire was developed and pre-tested with the help of ALICER, the Spanish Centre for Innovation and Technology in Ceramic Industrial Design, to assure that the items included were correctly understood by respondents. We received a total amount of 157 valid questionnaires from SMEs, 95 from Spanish firms and 62 from Italian firms, which represents almost half the population under study. Nonresponse bias was assessed through a comparison of variables such as number of employees or sales volume, available from public secondary data sources. Following recommendations by the European Commission, we classified SMEs into microenterprises (1–9 employees, 8% of the sample), small enterprises (10–49 employees, 72%), and medium enterprises (50–249 employees, 20%). Table 1 presents correlations, means, composite and alpha reliabilities of the sample. KM practices and KM dynamic capabilities were assessed through measurement scales based on Alegre et al. (2011). KMP contains two dimensions: Knowledge Dissemination Practices (KDP) and Knowledge Storage Practices (KSP). The first dimension is composed of four items that highlight the participation of employees by group interaction, which is needed to disseminate tacit knowledge in the organization (Nonaka & Tackeuchi, 1995).

Table 1 Correlations, means, standard deviations and reliabilities. Variable

Mean

SD

Composite reliability

KDP

KSP

EKI

IKD

EXP

KDP KSP EKI IKD EXPORTS EXPERIENCE

4.46 4.40 4.15 4.09 37.15 20.34

1.35 1.48 1.48 1.63 23.00 16.15

0.80 0.85 0.79 0.87 – –

(0.91) 0.426** 0.315** 0.228** 0.151 0.028

(0.89) 0.373** 0.413** 0.287** 0.207**

(0.88) 0.755** 0.297** 0.139

(0.90) 0.367 0.133

0.110

N = 157; alpha reliabilities are shown on the diagonal. ** Correlation is significant at the 0.01 level.

Experience

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The second dimension consists of three items reflecting the capabilities of the firm to retain the relevant information and apply it in the export venture. Regarding KMDC, CFA upholds two dimensions of the construct, External Knowledge Integration (EKI) and Internal Knowledge Development (IKD). External knowledge integration is composed of three items dealing with the ability of the firm to acquire knowledge that is located outside their boundaries, likewise to create new ones by collaborating with other agents. Internal knowledge development is path dependent, so this construct is composed of three items associated with those firm abilities helping to create and manage internal knowledge development. We maintained some of the items in the original scale related to innovation efforts, as organizational learning and innovation patterns in these industries have been shown to affect exports (Alegre, Pla-Barber, Chiva, & Villar, 2012). Export intensity has been measured as the ratio of exports/sales volume in 2007. Among the objective indicators of export performance, export intensity is by far the most common in the literature and has been widely used in other works reporting similar research questions (Katsikeas, Leonidou, & Morgan, 2000; Majocchi, Bacchiocchi, & Mayrhofer, 2005). Following previous works, we introduced a lag of three years between the adoption of KMP and KMDC and Exports, as this can help to reduce the problems arising from the simultaneity of the variables (Salomon & Shaver, 2005). We also included Experience as a control variable, measured as the number of years since its foundation, as this accounts for the experience and absorptive capacity that a company has gained and integrated over time (Galende & De la Fuente, 2003). Firm age has been previously used as a proxy variable to account for firm international experience (for instance, Majocchi et al., 2005). 4. Results Structural equation modeling was analyzed using AMOS software. For the measurement scale model, we checked different dimensions including content validity, reliability and convergent and discriminant validity. Content validity accounts for the adequacy of the items to measure the magnitude (Nunnally, 1978). This is assumed when the scales have been constructed according to the existent literature and through the development of interviews with experts in ALICER. Scale reliability was assessed with composite reliability indicators over 0.70 and high alpha coefficients (Table 1). Convergent validity is accepted as factor loadings overcome the acceptable levels, and t-coefficients are significant (higher than 1.96). Following Gatignon, Tushman, Smith, and Anderson (2002), discriminant validity was tested by performing a confirmatory factor analyses comparing the differences between a constrained CFA with an interfactor correlation set to 1 and a unconstrained model with an interfactor correlation set free. We also checked the loadings of the first-order factors items on the two second-order factors in our model, which were above 0.5 and significant. In sum, all fit indexes in the confirmatory model were superior to the reference values and indicated a good fit of the data. In order to minimize common method variance problems, we performed Harman’s single factor test (Podasakoff & Organ, 1986) in order to assess the possibility that a single variable might account for all the indicators. During the questionnaire design and data collection period, we also collected responses from two different key informants to avoid potential biases. 4.1. Test of the mediation hypotheses Following the approach by Baron and Kenny (1986) and Shrout and Bolger (2002), we conducted a test on the mediating effect of KMDC by assessing a conceptual model and a direct

Table 2 Results of the structural models. Model Mediated model

Direct modelc

b

Hypotheses

St. coefficients

t-Valuea

KMP ! KMDC KMDC ! EXPORTS KMP ! EXPORTS

0.54 0.27 0.19

3.84 2.44 1.62 (n.s.)

KMP ! KMDC KMP ! EXPORTS

0.65 0.43

3.95 3.53

N = 157. a Significant at p  0.05if t  1.64. b Fit indexes: x2 = 155.9 (83 d.f.); p = 0.00; CFI = .95; TLI = .94; GFI = .90; NFI = .91; RMSEA = .075. c Fit indexes: x2 = 160.7 (84 d.f.); p = 0.00; CFI = .95; TLI=.94; GFI = .89; NFI = .9; RMSEA = .076.

model. Table 2 accounts for the results of this test for both the direct and mediated model, comparing the fit between them. Results provide evidence that KMP has a positive effect on Export intensity (KMP-EXP: 0.43, t-value = 3.53), thus we can accept H1. In the mediated model the path between KMP and KMDC is significant with a positive sign (0.54, t-value = 3.84), a well as the path between KMDC and Exports (0.27, t-value = 2.44). However, the path between KMP and Exports in the mediated model is positive but not significant (0.19, t-value = 1.62). Thus, the direct effect in the mediated model lost strength, becoming even nonsignificant. Moreover, the mediated model offers a significant improvement compared to the direct. With 1 degree of freedom, a chisquare difference of 3.84 would indicate a better fit in the mediated model. The significant chi-square difference between direct and mediated model confirm a better fit of the second model (4.72 > 3.84). Besides, the indirect effect equals the total effect to the extent that the effect of KMP on Exports becomes nonsignificant. KMP positively influences Exports in the direct model, with a lower effect in the mediated model compared to the direct model (0.192 < 0.336). If we decompose the mediation effects into its components, the standardized effect of KMP on Exports is the sum of the direct effect and the indirect effect (through KMDC), where 0.338 = 0.192 + 0.146 (effect for the paths KMP-KMDC and KMDC-EXP). Results confirming a superior fit for the mediated model point to a case of total mediation (Judd & Kenny, 1981; Shrout & Bolger, 2002; Zhao, Lynch, & Chen, 2010), as this relationship is enabled by the variable Knowledge Management Dynamic Capabilities. We believe this might be due to the fact that a positive influence on exports does not lie in the implementation on practices by itself, but in the capability to recombine and adapt these practices. This means that the positive impact of the implementation of KMP over export intensity is highly dependent on the existence of dynamic capabilities in knowledge management, so dynamic capabilities account for the positive effect of knowledge management on exporting.

5. Discussion While in recent years knowledge management and dynamic capabilities are among the research areas receiving more attention from scholars, little prior research has focused in the case of exports, and particularly tested in the context of SMEs in industries excluding high tech. This study analyzes the application of basic and specific knowledge mechanisms for SMEs operating in mature and globalized industry, providing some clues to improve export intensity on the implementation of knowledge management best practices.

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Knowledge management has been posited to offer a useful theoretical framework for export strategy research. Although the adoption of knowledge management practices is generally considered to impact on firm performance, we lack empirical evidence supporting this idea on export performance. This is particularly relevant for SMEs, where in many cases there is no formal knowledge strategy and knowledge creation, storage and dissemination processes have a profound impact on the ability to compete (Durst & Edvardsson, 2012). With this aim, in this paper we have focused on the relationships among KMP, KMDC and Export Intensity in SMEs. Our findings suggest a full mediating positive effect of KMDC between the constructs of KMP and EXP. This suggest that the existence of dynamic capabilities is the hub for SMEs to achieve better results in terms of export intensity in the context of a globalized industry, characterized by a high fragmentation. That is, in spite of adopting efficient KMP, its positive effect is dependent on the existence and management of dynamic capabilities in the organization. In short, results evidence the role of these simple organizational practices to take on the mechanisms facilitating a better organization of SME’s limited capabilities. Even if the firm efficiently deals with knowledge management practices, there is no point if it lacks the capabilities to reconfigurate these practices over time. We believe this study can make some interesting contributions for export literature from dynamic capabilities framework. The total mediating effect in our model might add some empirical evidence to dynamic capabilities (Easterby-Smith & Prieto, 2008; Zollo & Winter, 2002), in particular in the research on exports (Lisboa et al., 2013; Morgan et al., 2012). Research on DCV is a still recent topic in international business and further analyses is needed, in particular with respect to empirical results. Our results might help to clarify dynamic capability process for knowledge management practices on exports. We have shown the importance of exploration and exploitation related capabilities in the export context, extending previous theoretical works on this issue (Kudsen & Madsen, 2002; Prange & Verdier, 2011). Specifically, this paper could provide a complementary enriched perspective on international ambidexterity literature (Luo, 2002; Luo & Rui, 2009; Prange & Verdier, 2011), which has been mainly tested in higher commitment entry modes. We measured these constructs with a time lag, thus overcoming one of the main limitations of previous cross-sectional studies on this stream of research. Moreover, by testing second-order knowledge management constructs, we can also show the requirement of previous conditions to achieve a better export performance, that is, the organizational routines (practices on storage and dissemination) that enable the exploitation of firm’s knowledge stock. This can help to explain why some firms implementing KMP cannot achieve a better export performance, which in the end affects firm performance. Our results may have interesting managerial implications for SMEs operating in sectors highly dependent on exports, such as the ceramic tile industry, where these capabilities require more managerial attention to achieve sustainable competitiveness. The implementation of best practices can provide the firm an important tool to improve their performance. However, and what is more important, we have shown that this is a not a sufficient condition. Managers must provide mechanisms to create, disseminate, and store knowledge within the organization, and establish systems to apply and reconfigure the relevant knowledge. Both internal knowledge creation and external knowledge development are key processes in the active search to both exploit and explore new knowledge, for instance through the cooperation with third parties in this type of industries. Human resources play a crucial role in this issue, so it becomes more important to foster employees’ commitment towards organizational learning.

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Some of the main limitations in the present study come from the measurement of the variables. Regarding the constructs of practices and dynamic capabilities, responses are based primarily on the perception of the managers. In addition, export performance is increasingly seen as a multidimensional construct with an economic and strategic component (Cavusgil & Zou, 1994). We have used export intensity as one of the most commonly used measures, while the combined use of objective and subjective measures would provide a fuller explanation of the export performance. In addition, other variables, such as international experience, might be also considered in the model. Research on different organizational contexts could help to assess these relationships more in-depth to confirm if our findings differ between industries, as well as the impact of these capabilities on firm-level performance. Finally, further studies could advance in this proposal to build a stronger and integrative framework on internationalization strategy. Acknowledgements Authors acknowledge the financial support received for this research from the Ministry of Science and Technology (ECO2010-18583) the Ministry of Education and Science (ECO2011-29863) and the University of Valencia (UV-INV-PRECOMP12-80779). Appendix A Scale items KMP

Knowledge management practices

KDP KDP1 KDP2 KDP3

knowledge dissemination practices (a = 0.91) Systems of explicit knowledge codification Mechanisms to foster information sharing by employees Employees’ participation techniques such as multidisciplinary teams, quality circles, improvement groups, etc. Information distribution systems for employees, customers and suppliers Knowledge storage practices (a = 0.89) Global gathering and information processing systems Control and revision systems for innovation projects Feed-back systems allowing knowledge created in finished innovation projects to be used in new projects

KDP4 KSP KSP1 KSP2 KSP3

KMDC

Knowledge management dynamic capabilities

EKI EKI1

External knowledge integration (a = 0.88) Ability to create knowledge through co-operation with industry associations Ability to create knowledge through co-operation with R&D institutions such as universities and technological institutes Technology acquisition Internal knowledge development (a = 0.90) Degree of academic qualification of employees (R&D function) Ability to be positioned on the technological front line/frontier Ability to manage the innovation effort

EKI2 EKI3 IKD IKD1 IKD2 IKD3

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