Why SMEs should develop ambidextrous capabilities to manage R&D investments and international growth

This paper uses a continuous innovation framework to explore the barriers and the potential benefits that Small and Medium Enterprise can face when they combine investments in R&D endeavors and in their international expansion. From a theoretical standpoint we claim that R&D and internationalization can be conflicting objectives that entail a diversity of routines and managerial approaches, which is critical especially when SMEs face early stages of their life cycle and have a small management team. Empirically, we found an indirect support to this view on a sample of 221 Italian SMEs, all having R&D expenditures. Specifically, we showed that firms that combine investments in R&D with higher levels of export have a more limited growth of their revenue, the younger the firm age. The implications of these results for managers, scholars and policy-makers are discussed.