A meta-analytic study on

exploration and exploitation

Xiaofeng Shi
School of Business, Nanjing Audit University, Nanjing, China, and
Lixun Su and Annie Peng Cui
College of Business and Economics, West Virginia University, Morgantown, West Virginia, USA

Abstract
Purpose – This study aims to fill three theoretical gaps in previous literature on exploration and exploitation: the relationship between exploration
and exploitation is inconclusive; the influences of exploration and exploitation on firm performance are not consistent; and no empirical studies have
integrated the antecedents of exploration and exploitation from the different research fields.
Design/methodology/approach – The study conducted a meta-analysis to quantitatively synthesize 143 studies with 257 independent samples to
understand the relationship between exploration and exploitation and their consequences and antecedents.
Findings – The results show that exploration and exploitation are positively correlated with each other, and both of them can boost firm
performance. Moreover, firm capabilities, firm size, firm age, competitive intensity, market orientation and entrepreneurial orientation positively
influence exploration, and firm resources, firm capabilities, firm size, firm age, market orientation and entrepreneurial orientation positively
influence exploitation. Competitive intensity negatively influences exploitation. Surprisingly, market turbulence does not significantly influence
exploration or exploitation.
Originality/value – The results not only contribute to the theories by reconciling the inconsistent results but also provide insight for firms with
guidance about under what conditions they should use what strategies.
Keywords Meta-analysis, Exploration, Exploitation
Paper type Research paper

Introduction theoretical gaps to fill. First, the relationship between

Since March (1991) published his seminal research on firms’
exploration and exploitation strategies, hundreds of papers
have been devoted to investigating how firms can gain
competitive advantages through leveraging exploration and
exploitation (Auh and Menguc, 2005; Gupta et al., 2006;
March, 1991; Nosella et al., 2012; Yalcinkaya et al., 2007;
Westerlund and Rajala, 2010). This stream of literature has
advanced our knowledge in the field of management (Jansen
et al., 2006; Phene et al., 2012), marketing (Eltantawy, 2016;
Kouropalatis et al., 2012; Mavondo et al., 2005; Strese et al.,
2016) and international business (Bass and Chakrabarty, 2014;
Jin et al., 2016; Vasilchenko and Morrish, 2011).
Broadly speaking, exploration enables firms to develop new
products, explore new markets, and design new business
processes, whereas exploitation strategy allows firms to update
existing products, exploit current markets, and refine current
business processes (Bandeira-de-mello et al., 2017). Previous
research has examined how exploitation and exploration
influence firm performance (Abebe and Angriawan, 2014;
Gibson and Birkinshaw, 2004). However, there are three
exploration and exploitation is not conclusive (Gupta et al.,
2006). Some scholars point out that exploitation and
exploration may impede each other because they compete for
resources (March, 1991). Conversely, other scholars find that
exploration and exploitation enhance each other because the
profit generated by one strategy provides potential resources to
develop another strategy (Lavie and Rosenkopf, 2006).
Second, extant research has found conflicting results regarding
the influences of exploration and exploitation on firm
performance. For example, some studies have found that a
focus on either exploration or exploitation leads to better firm
performance (Lin et al., 2007), whereas others have found that
it decreases firm performance (Hjelmgren and Dubois, 2013).
Third, while previous studies have theoretically proposed a
number of factors that may influence a firm’s choice between
exploration and exploitation, only a small number of papers
have empirically examined these factors in isolation (Dayan
et al., 2016; Fletcher-Chen et al., 2017). To the best of our
knowledge, no empirical studies have integrated these
antecedents of exploration and exploitation and explored these

The current issue and full text archive of this journal is available on
Emerald Insight at: www.emeraldinsight.com/0885-8624.htm
The authors would like to thank the anonymous reviewers for their
valuable suggestions that were used to improve the paper. This work was
supported by the National Nature Science Foundation of China (No.
71571085, No. 71772088), and the Priority Academic Program
Development of Jiangsu Higher Education Institutions (PAPD).

Received 25 March 2019

Journal of Business & Industrial Marketing Revised 27 June 2019
© Emerald Publishing Limited [ISSN 0885-8624] 4 July 2019
[DOI 10.1108/JBIM-03-2019-0119] Accepted 5 July 2019
 Study on exploration and exploitation
Xiaofeng Shi, Lixun Su and Annie Peng Cui
relationships simultaneously. Meta-analysis allows us to fill
these gaps by synthesizing previous findings and examining the
antecedents derived from different research strands in one big
picture (Rosenthal and DiMatteo, 2001).
To fill the theoretical gaps, the purpose of this study is
threefold. First, we quantitatively synthesize the literature to
understand the relationship between exploration and
exploitation and identify the moderators of the relationship.
Second, the study aims to identify factors that moderate the
influence of exploration and exploitation on firm performance.
The third goal is to provide a meta-analytic review of
the antecedents of exploration and exploitation and to test the
mediating effects of exploration and exploitation between the
antecedents and firm performance.
By doing so, this study contributes to the current research in
four ways. First, a clear understanding of the relationship
between exploration and exploitation will help firms achieve a
balance of exploration and exploitation. Uncovering the
relationship between exploration and exploitation could help
firms make decisions on the balance of exploration and
exploitation. Specifically, previous research has proposed two
ways to balance exploration and exploitation: temporal
separation and organizational separation (Lavie et al., 2011).
Temporal separation means that firms switch between
exploration and exploitation over time (Gibson and
Birkinshaw, 2004), and organizational separation means firms
implement different strategies in different business units at the
same period (Lavie et al., 2011). We argue that temporal
separation and organizational separation have different
premises on the relationship between exploration and
exploitation. Specifically, if exploration and exploitation
impede each other, organizational separation would dilute firm
resources and finally reduce firm performance. If exploration
and exploitation enhance each other, temporal separation
would miss opportunities to leverage the interactive effects
between exploration and exploitation. Therefore, the methods
to balance exploration and exploitation somehow depend on
the interpretation of the relationship between exploration and
exploitation.
Second, conducting a meta-analytic review of the
antecedents of exploration and exploitation can help
disentangle the influence of each antecedent. Specifically,
previous studies usually focus on examining the influence of
one or two variables (e.g. market orientation or the interaction
effects of market orientation and competitive intensity) on the
adoption of exploration and exploitation (Jansen et al., 2006;
Su et al., 2011; Voss et al., 2008). In this study, we
simultaneously examine eight antecedents regarding firms’
characteristics, environmental characteristics, or strategic
decision-making styles in one model and conduct a structural
equation modeling (SEM) analysis to collectively test the
influence of the antecedents. SEM helps capture the
relationships between these variables better than correlation-
based models. Furthermore, SEM analysis allows us to test the
mediating effects of exploration and exploitation between the
eight antecedents and firm performance.
Third, though Junni et al.’s (2013) meta-analytic study
examined 69 studies on exploration and exploitation published
before 2013, hundreds of additional studies have been
published since then. As these more recent publications
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contributed to the complexity and inclusiveness of this stream
of literature, it is necessary to integrate these recent
publications. Specifically, this study included 143 studies
and 257 independent samples (as compared to 69 studies
and 135 samples in Junni et al.’s (2013) study).
Finally, our results could provide insight for marketers on
how to select strategies between exploitation and/or
exploration. As alluded to before, there is no panacea for firms’
strategy adoption. For example, Auh and Menguc (2005) find
that simultaneous implementation of exploration and
exploitation would improve firm performance. By contrast, Ho
and Lu (2015) find that for small- and medium-sized firms, a
focus on a single strategy would increase firm performance.
Therefore, by a meta-analytic study, we expect to find what
kind of firms could benefit from exploration and exploitation
and provide some guidance for different types of firms on
strategy adoption.
The paper is organized as follows: We first review the
literature on the relationship between exploration and
exploitation, their antecedents, and their influence on firm
performance. We then test these relationships in a meta-
analysis, followed by a discussion about our findings and
implications.
Literature review
Since organizational exploration and exploitation have been
investigated in different research areas such as marketing,
management, innovation, and so on, different aliases and
constructs with similar definitions are used in different areas. In
this study, we adopt Vermeulen and Barkema’s (2001)
definitions of exploration as “the search for new knowledge”
(Vermeulen and Barkeman, 2001, p. 459)and exploitation as
“the ongoing use of a firm’s knowledge base” (Vermeulen and
Barkeman, 2001, p. 459) (see Table I for a list of key literature).
Exploration and exploitation originate from organizational
learning theory, and they describe different ways in which firms
produce knowledge (March, 1991; Özsomer and Gençtürk,
2003). Exploration generates new knowledge through radical
innovation, but exploitation advances current knowledge
through incremental innovation (Özsomer and Gençtürk,
2003). Therefore, the benefits from exploration are usually
uncertain and are materialized in the long term (Özsomer and
Gençtürk, 2003). By contrast, the benefits from exploitation
are usually certain and immediate (Özsomer and Gençtürk,
2003). Specifically, in the product domain exploration
emphasizes the invention of new products and technologies
whereas exploitation emphasizes the refinement of the existing
knowledge and technologies (Voss and Voss, 2013). In the
market domain, exploration emphasizes developing marketing
programs to explore new markets whereas exploitation
emphasizes designing marketing programs to retain current
markets (Voss and Voss, 2013).
The relationship between exploration and exploitation
Some scholars suggest that it is hard for firms to deploy
exploitation and exploration simultaneously because the two
strategies demand different resources (March, 1991). For
example, the resources on developing new products
(exploration) are rarely applicable to refining existing products
 Study on exploration and exploitation
Xiaofeng Shi, Lixun Su and Annie Peng Cui
Table I. Review of construct definitions, aliases and representative studies
Construct Definitions
Strategies
Exploration The search for new knowledge (Vermeulen
and Barkema, (2001), p. 459)
Exploitation The ongoing use of a firm’s knowledge base
(Vermeulen and Barkema(2001), p. 459)
Antecedents
Firm characteristics
Firm resources All assets, capabilities, organizational
processes, firm attributes, information, and
knowledge controlled by a firm(Barney
(1991), p. 1)
Firm capabilities Complex bundles of skills and accumulated
knowledge that enable firms to coordinate
actives and make use of their assets (Day,
1994, p. 38)
Firm size
Firm age The time since firms are established
Environmental characteristics
Market turbulence Market demand is hard to predict accurately Market dynamism, demand
because of such factors as consumers’
changing tastes.(Yang and Steensma, 2014) dynamism, market uncertainty, and
Competitive intensity A situation where competitionis fierce due Competitiveness, competitive
to the number of competitors in the
marketand the lack of potential
opportunities for further growth (Auh and
Menguc, 2005, p. 1654)
Strategy-making styles
Market orientation The extent to which a firm engages in the
generation, dissemination, and response to orientation
market intelligence pertaining to current
and future needs, competitor strategies and
actions, channel requirements and abilities,
and the broader business environment.
(Morgan et al., 2009, p. 910)
Entrepreneurial orientation Firms seek new market opportunities and
the renewal of existing areas of operation.
(Hult and Ketchen Jr. 2001)
Consequence
Firm performance
(exploitation). Hence, assuming firms’ total resources are
constant, allocation of resources on one strategy decreases the
resources available for another strategy. Thus, exploitation and
exploration may impede each other (Özsomer and Gençtürk,
2003).
In addition, successful balance between exploitation and
exploration also requires versatile senior managers who have
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Common aliases Representative papers
Radical innovation, explorative O’Cass et al. (2014); Skarmeas et al.
capability (2016); Cui et al. (2014);
Incremental innovation, exploitative Tu (2010); Gatti et al. (2015);
capability Vermeulen and Barkema (2001);
Slack resources, market resources, Yalcinkaya, et al. (2007);
and knowledge Kouropalatis, et al. (2012); Voss
et al. (2008); Yang et al. (2011);
Ability, absorptive ability, dynamic Strese et al. (2016); Mu (2015); Bass
capability, marketing capability, and and Chakrabarty (2014); Lavie and
capability Rosenkopf (2006);
Meyer and Subramaniam (2014);
Lubatkin et al. (2006);
Firm year Beckman (2006); Heavey and Simsek
(2017); Cao et al. (2009);
Menguc and Auh (2008); Ho and Lu
dynamism, environmental (2015); Lee et al. (2016);
demand uncertainty
Ricciardi et al. (2016); Jin et al.
environments (2016); Patel et al. (2013);
Customer orientation, competitor Abebe and Angriawan (2014);
Kyriakopoulos and Moorman (2004);
Innovation orientation Zhang et al. (2016); Lisboa et al.
(2016); Mom et al. (2007);
Innovation performance, product Lisboa et al. (2011); Zhang et al.
performance, brand performance, (2015)
customer loyalty, customer
satisfaction, customer commitment,
market effectiveness
multifaceted capabilities and expertise (Ebben and Johnson,
2005). However, many firms’ upper management, especially in
small and medium-sized firms, may not have these capabilities
and expertise (Ebben and Johnson, 2005). For example,
exploitation requires managers to have the ability to process
information and knowledge from higher hierarchical levels
(Mom et al., 2007). On the contrary, exploration requires
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Xiaofeng Shi, Lixun Su and Annie Peng Cui
managers to have the ability to process information and
knowledge from lower hierarchical levels (Mom et al., 2007). The
difficulties of integrating information from different information
sources make it problematic for managers to coordinate
explorative and exploitative activities (Jansen et al., 2008).
Therefore, the limitations of managers’ expertise usually prevent
firms from implementing exploitation and exploration
simultaneously.
Taking a different point of view, some studies propose that
exploration and exploitation enhance each other. Based on
absorptive ability theory, the effectiveness of explorative
abilities would be maximized only when firms already have
strong exploitive capabilities (Hoang and Rothaermel, 2010).
In other words, when a firm implements exploitation to refine
current technologies, it may find it easier to introduce new
technologies (Hoang and Rothaermel, 2010).
In sum, previous research holds different arguments about
the relationship between exploration and exploitation.
Therefore, we propose two competing hypotheses on the
relationship between exploration and exploitation:
H1a. Exploration and exploitation are positively related to
each other.
H1b. Exploration and exploitation are negatively related to
each other.
Consequences of exploration and exploitation
Consequences of exploration
In March’s (1991, p. 71) seminal research, exploration includes
things “such as search, variation, risk taking, experimentation,
play, flexibility, discovery, and innovation.” Exploration is
vitally important when firms develop new products, explore
new markets, or implement new technologies (March, 1991).
An abundance of empirical research has found that exploration
is positively related to firm performance (Lisboa et al., 2013)
since it is able to generate profits for firms from new
opportunities, new markets, new technologies and products,
and new business processes (Özsomer and Gençtürk, 2003).
Moreover, exploration can continuously increase firms’
effectiveness and upgrade their current resources and
capabilities, and thus generate long-term profits (Özsomer and
Gençtürk, 2003). That is to say, exploration can help firms
anticipate market trends and capitalize on market
opportunities, resulting in long-term profits.
However, exploration is also likely to reduce firm
performance, especially in the short term. Based on the
threshold effect of firm capabilities, capabilities and resources
boost firm performance only when they exceed a certain
threshold level (Naldi et al., 2014). The threshold effect occurs
because the initial investments on developing capabilities and
procuring resources are so considerable as to exceed the
immediate outputs, and the realization of profits occurs only
when the outputs outweigh the accumulative inputs (Naldi
et al., 2014). Based on the threshold effect, exploration requires
vast investments and may reduce firm performance in the short
term because the profits generated by exploration may not
materialize speedily, if at all. In addition, new products often
fail, new markets may be unprofitable, and new technology may
Journal of Business & Industrial Marketing
go wrong. Thus, exploration is also likely to reduce firm
performance in the long term. Based on the discussion above,
we propose two competing hypotheses:
H2a. Exploration is positively related to firm performance.
H2b. Exploration is negatively related to firm performance.
Consequences of exploitation
In March’s (1991, p. 71) research, exploitation includes such
things as “refinement, choice, production, efficiency, selection,
implementation, and execution,” and it focuses on exploiting
existing products and knowledge within firms. Exploitation can
generate profits through exploiting and integrating current
resources and improving efficiency of current business
processes (Cui et al., 2014; Holmqvist, 2004). Since
exploitation focuses on how to better utilize knowledge that is
already at firms’ fingertips (i.e. current market information,
supply chain networks, and technologies), only minimal risks
and uncertainty are involved (March, 1991). Thus, the profits
from exploitation strategy are usually certain and immediate
(Özsomer and Gençtürk, 2003).
However, if a firm tightly emphasizes exploitation, it may
suffer possible inadaptability to the environments and
obsolescence of technologies, hindering firms from further
development and expansion in the long term (Nätti and
Ojasalo, 2008; Özsomer and Gençtürk, 2003). For this reason,
exploitation is also likely to reduce firm performance. Based on
market orientation theory, if a firm tightly focuses on its current
consumers’ needs and demands, it may lose abilities to
innovate new products and miss potential market opportunities
(Andriopoulos and Lewis, 2009). Using the same logic,
exploitation may lock firms in their current markets and
technologies, eventually hurting their innovative abilities.
Based on the discussion above, we propose two competing
hypotheses:
H3a. Exploitation is positively related to firm performance.
H3b. Exploitation is negatively related to firm performance.
Antecedents of exploration and exploitation
Raisch and Birkinshaw (2008) propose a theoretical model that
delineates the influence of organizational antecedents,
environmental factors, and other factors (e.g. market
orientation) on exploration and exploitation. To provide
empirical support to Raisch and Birkinshaw’s (2008)
comprehensive model, we test the influence of various
organizational characteristics (i.e. firm resource, firm
capability, firm size, and firm age), environmental
characteristics (i.e. market turbulence and competitive
intensity), and strategic decision-making styles (i.e. market
orientation and entrepreneurial orientation) on exploration and
exploitation.
Organizational characteristics
The present study examines four organizational characteristics:
firm characteristics such as firm resources, firm capabilities,
firm size, and firm age. Based on a resource-based view, firm
resources refer to “all assets, capabilities, organizational
 Study on exploration and exploitation
Xiaofeng Shi, Lixun Su and Annie Peng Cui
processes, firm attributes, information, and knowledge
controlled by a firm” (Barney, 1991, p. 101). To achieve a
competitive advantage, firms should convert resources into
capabilities (Nath et al., 2010; Yalcinkaya et al., 2007). Firm
capabilities are defined as “complex bundles of skills and
collective learning, excised through organizational processes,
that ensure superior coordination of functional activities” (Day,
1994, p. 38). Firm capabilities are “intermediate goods” that
firms generate from their business processes to enhance the
productivity of resources (Amit and Schoemaker, 1993, p. 35).
Sufficient resources and strong capabilities provide firms with
opportunities to exploit their current markets and products
and/or explore new markets and products (Fischer et al., 2010).
In addition, strong capabilities to coordinate exploration and
exploitation activities make it possible for firms to seek a
balance between the strategies. In other words, sufficient
resources and capabilities are prerequisites for implementing
exploration or exploitation. Therefore, we hypothesize that:
H4. Firm resources are positively related to (a) exploration
and (b) exploitation.
H5. Firm capabilities are positively related to (a) exploration
and (b) exploitation.
Previous studies have already demonstrated that firm size and
firm age are positively correlated with firm resources and firm
capabilities (Chen and Hambrick, 1995; Shan et al., 1994).
Therefore, we expect that firm size and age have similar
influences on exploration and exploitation as firm resources
and capabilities do. Specifically, small and medium-sized firms
do not have as many resources and strong capabilities as large
firms do (Chen and Hambrick, 1995). Therefore, the extent of
exploration and exploitation should be lower in small and
medium-sized firms than that in large firms (Voss and Voss,
2013). Moreover, novice firms might engage in only a minimal
amount of exploration and exploitation compared to old firms
because of lack of experience and resources. In sum, we
hypothesize that:
H6. Firm size is positively related to (a) exploration and (b)
exploitation.
H7. Firm age is positively related to (a) exploration and (b)
exploitation.
Environmental characteristics
This study examines two environmental characteristics: market
turbulence and competitive intensity. Market turbulence refers
to the situation where market demand is hard to predict
accurately because of factors such as consumers’ changing
tastes (Yang and Steensma, 2014). When market turbulence is
high, exploration would make business environments more
uncertain since exploration involves a process of trial and error
and only generates uncertain profits (Palmer and Wiseman,
1999). Under this circumstance, firms should avoid
exploration to decrease uncertainty. In addition, the profits
generated by exploration are usually uncertain and may be
materialized only in the long term, if at all (Gibson and
Birkinshaw, 2004). Therefore, firms will be less likely to
undertake exploration in a highly turbulent market.
Journal of Business & Industrial Marketing
Unlike exploration, exploitation involves only minimal risk
and uncertainties, and it can bring firms steady profits (March,
1991). Since firms would desire more certain profits in
uncertain environments, exploitation is often preferred (Yang
and Steensma, 2014). As a consequence, market turbulence
often leads to adoption of exploitation over exploration.
Formally, we hypothesize:
H8. Market turbulence is negatively related to (a)
exploration, but positively related to (b) exploitation.
Competitive intensity is defined “as a situation where
competition is fierce due to the number of competitors in the
market and the lack of potential opportunities for further
growth” (Auh and Menguc, 2005, p. 1654). When competition
is intense, firm are prone to undertake exploration because
providing new products for consumers can help firms
differentiate from their competitors and, finally, stand out in
the competition (Abebe and Angriawan, 2014). Conversely, if
firms undertake exploitation, competitors’ rapid R&D would
soon make focal firms’ products obsolete. Therefore, when
competitive intensity is high, exploration is favored more than
exploitation. Hence, we hypothesize that:
H9. Competitive intensity is positively related to (a)
exploration, but negatively related to (b) exploitation.
Strategic decision-making styles
This study examines two strategic decision-making styles:
market orientation and entrepreneurial orientation. Market
orientation is defined as “the extent to which a firm engages in
the generation, dissemination, and response to market
intelligence pertaining to current and future needs, competitor
strategies and actions, channel requirements and abilities, and
the broader business environment” (Morgan et al., 2009,
p. 910). Since market orientation reflects an informal culture or
a shared mindset of a firm, assuming that value creation for
customers is the key driver of business profitability (Frösén
et al., 2016), this study treats market orientation as a type of
strategic decision-making style. In other words, when firms
believe in the importance of value creation for customers, they
are more market oriented and will base their strategies on
current markets and predictions of future markets. Market
orientation entails both meeting customers’ current
expectations and anticipating future needs, analyzing market
trends, and developing and delivering right products to current
and prospective customers (Kumar et al., 2011). Therefore,
market-oriented firms might be motivated to deploy
exploitation to satisfy current consumers as well as exploration
to satisfy potential consumers. Empirical results also confirm
the positive influence of market orientation on exploration and
exploitation (Abebe and Angriawan, 2014; Tsou et al., 2014).
Thus, we hypothesize that:
H10. Market orientation is positively related to (a)
exploration and (b) exploitation.
The counterpoint of market orientation is entrepreneurial
orientation, which means that firms seek “new market
opportunities and the renewal of existing areas of operation”
(Hult and Ketchen Jr., 2001, p. 901). Entrepreneurial
 Study on exploration and exploitation
Xiaofeng Shi, Lixun Su and Annie Peng Cui
orientation has three dimensions: (1) innovativeness, (2)
proactiveness, and (3) risk-taking (Covin and Slevin, 1989).
Innovativeness includes firms’ predisposition to embrace
creativity and experimentation; proactiveness means firms’
predisposition to anticipate and act on future market trends;
and risk-taking entails firms’ predisposition to explore the
unknown (Rauch et al., 2009). The three components of
entrepreneurial orientation suggest that entrepreneurship-
oriented firms would rather explore something new than exploit
something old because exploring something new is consistent
with their values, beliefs, and mindsets. Therefore, we argue
that entrepreneurial orientation boosts firms’ exploration but
lessens exploitation. Formally, we hypothesize that:
H11. Entrepreneurial orientation is positively related to (a)
exploration, but negatively related to (b) exploitation
strategy.
Methodological moderators between strategies
and firm performance
As H1a-H3b show, there are conflicting results on the
relationship between exploration and exploitation and
the influence of exploration and exploitation on firm
performance. To reconcile the conflicting results, we examine
three methodological moderators.
One potential methodological moderator is the measurement
of firm performance. Firm performance is measured in
different ways in extant research, including subjective
measurements and objective measurements. Since subjective
measurements emphasize comparison between focal firms’
performances and their competitors’ performances or
difference between firms’ goals and actual performances (Cui
et al., 2014), but objective measurements focus on firms’
financial figures, we expect that the measurement of firm
performance (subjective versus objective) might moderate the
influence of exploration and exploitation on firm performance.
The second methodological moderator is research setting.
One common research setting of exploration and exploitation is
R&D (Kindström and Kowalkowski, 2014). Since R&D has
higher demands on firms’ exploration than other business
processes (Komulainen, 2014), we expect that the relationship
between exploration and exploitation might differ across R&D
settings and non-R&D settings.
Finally, we examine research design as a moderator. Two
common data sources in exploration and exploitation studies
are survey and secondary data. When surveys are conducted,
exploration and exploitation are measured by well-established
scales (Cui et al., 2014), and the data are collected directly from
firms’ managers. When secondary data are used, exploration
and exploitation are usually measured by the number of firms’
patents or extracted based on archival data such as shareholders
and newspapers (Lavie et al., 2011; Wang and Dass, 2017). We
argue that direct responses from firms can measure exploration
and exploitation more accurately than secondary data can.
Therefore, the influence of exploration and exploitation on firm
performance and the relationship between exploration and
exploitation might vary depending on research designs.
Journal of Business & Industrial Marketing
Methodology
In this section, we describe the procedure used to conduct the
meta-analysis on exploitation and exploration. Specifically, we
describe the process of literature search, the coding of empirical
studies, and data analysis. Then, we report and explain the results.
Literature search
First, we performed a keyword search (e.g. exploration and
exploitation) on the management (83) and marketing (78)
journals included in the journal list adopted by a public
university on ABI/Global Inform and Business Source
Premiere databases to locate relevant studies. The following
journals have published empirical studies on exploration and/or
exploitation: Academy of Management Journal; Academy of
Management Review; Administrative Science Quarterly; Asia
Pacific Journal of Management; British Journal of Management;
Entrepreneurship Theory and Practice; European Journal of
Marketing; European Management Journal; European
Management Review; Group and Organization Management;
Human Relations; Industrial Marketing Management;
International Journal of Research in Marketing; International
Marketing Review; Journal of Business & Industrial Marketing;
Journal of Business Ethics; Journal of Business Logistics; Journal of
Business Research; Journal of Business Venturing; Journal of
International Business Studies; Journal of International Marketing;
Journal of Knowledge Management; Journal of Management;
Journal of Management Information Systems; Journal of
Management Studies; Journal of Marketing; Journal of Marketing
Research; Journal of Marketing Theory and Practice; Journal of
Operational Management; Journal of Organizational Behavior;
Journal of Product Innovation Management; Journal of Retailing;
Journal of Services Marketing; Journal of Small Business
Management; Journal of the Academy of Marketing Science;
Journal of World Business; Leadership Quarterly; Long Range
Planning; Management Science; Marketing Letters; Marketing
Science; Management of Information Systems Quarterly;
Organizational Science; Research Policy; and Strategic
Management Journal from 1975 to 2017. Based on our research,
these journals publish the majority of the research on
exploration and exploitation.
Two criteria were used to screen the papers:
1 it included the correlation between exploration and
exploitation, the correlations between the strategies and
firm performance, or the correlations between the
antecedent and the strategies; and
2 it had sufficient information to calculate effect sizes.
Finally, we included 152 studies with 288 independent
samples. Two independent researchers coded the studies
(overall agreement > 90 per cent) and disagreements were
resolved through discussion.
Univariate analysis procedure
Consistent with Crosno and Brown (2015), this study used
Pearson’s product moment correlation, r, to represent effect
size. When one study used multiple items to represent
exploration and exploitation, we calculated the mean, r. When
one study used different methods to measure firm
performance, we analyzed the relationship separately. Then, we
 Study on exploration and exploitation
Xiaofeng Shi, Lixun Su and Annie Peng Cui
used box-and-whisker plots to examine outliers. After deleting
the outliers, we got 1,757 effect sizes from 257 independent
sample studies in 143 studies. The sample sizes were between
200 and 10,992, and the total sample size was 150,068.
Next, we manually conducted reliability correction to account
for measurement error when reliabilities were reported. Then, we
used Comprehensive Meta-Analysis Software to calculate
sample-weighted r, the 95 per cent confident interval for the
sample-weighted r, fail-safe N, and chi-square of homogeneity.
Chi-square of homogeneity is used to test the existence of
moderators (Crosno and Brown, 2015). When chi-square test of
homogeneity is significant, we report the correlation coefficients
in different groups split along moderators.
We performed such analysis for the relationship between
exploration and exploitation, the influence of the two strategies
on firm performance, and the influence of the eight antecedents
on the two strategies. Note that the moderating effects of
methodological factors between strategies and their
antecedents are not examined in this study because such
moderating effects are not the focus of this study.
Causal model
In addition to the pairwise analysis, we used AMOS 24.0 to
conduct a SEM analysis to test how firm characteristics,
environmental characteristics, and strategic decision-making
styles influence firms’ strategies, which in turn influence firm
performance (see Figure 1). SEM requires available correlation
effects between each construct in the model with all other
constructs (Palmatier et al., 2006). Therefore, consistent with
Palmatier et al. (2006), we included only the studies that
comprise three or more correlation coefficients. Finally, we got a
correlation matrix with 11 variables. Consistent with Palmatier
et al. (2006), we used the median sample size from our meta-
analysis as sample size when running SEM, which is 4,467.
Meta-Analysis results
In this section, we first provide univariate results for the
relationship between exploration and exploitation, the
Figure 1 Exploration and exploitation meta-analytic framework
Firm
characteristics
Firm resources
Firm capabilities
Firm size
Firm age Exploration
Environmental Firm performance
characteristics
Market turbulence Exploitation
Competitive intensity
Strategic decision-making
styles Positive
Negative
Market orientation
N.S.
Entrepreneurial orientation
Journal of Business & Industrial Marketing
influence of exploration and exploitation on firm performance,
and the relationship between the antecedents and exploration
and exploitation. Doing so allows us to identify the most
influential antecedents of each strategy and to clarify the
correlations between the strategies and performance. Finally,
we provide the results of SEM to test the proposed research
model as shown in Figure 1.
Univariate results
In Table II, we report the univariate meta-analysis results for
the relationship between exploration and exploitation and for
their antecedents and consequences. Table II shows that
exploration and exploitation are positively correlated with each
other (r = 0.380, p < 0.05). Exploration and exploitation are
positively correlated with firm performance (r = 0.166,
p < 0.05; and r = 0.213, p < 0.05, respectively). Therefore, H1-
H3a are supported, and H1-H3b are rejected.
Regarding the antecedents of the strategies, exploration is
positively correlated with firm resources (r = 0.171, p < 0.05),
firm capabilities (r = 0.207, p < 0.05), firm size (r = 0.048,
p < 0.05), firm age (r = 0.011, p < 0.05), market turbulence
(r = 0.121, p < 0.05), competitive intensity (r = 0.094,
p < 0.05), market orientation (r = 0.236, p < 0.05), and
entrepreneurial orientation (r = 0.429, p < 0.05).
Exploitation is positively correlated with firm resources
(r = 0.230, p < 0.05), firm capabilities (r = 0.277, p < 0.05),
firm size (r = 0.069, p < 0.05), firm age (r = 0.038, p < 0.05),
market turbulence (r = 0.096, p < 0.05), market orientation
(r = 0.223, p < 0.05), and entrepreneurial orientation
(r = 0.345, p < 0.05), but not significantly correlated with
competitive intensity (r = 0.008, p = 0.901).
Since Chi-square tests of homogeneity for the relationship
between exploration and exploitation and for the influence of
exploration and exploitation on firm performance are
significant, we conducted moderator analyses (Table III).
Specifically, we conducted a subgroup analysis via
Comprehensive Meta-Analysis Software to compare the
differences in effect sizes.
Moderator results
Study design
We compared surveys against other research designs (i.e.
secondary data, content analysis, and multiple-method). The
positive correlation between exploration and exploitation has
no significant differences across study designs (r = 0.393 for
surveys, r = 0.352 for other research designs, p > 0.1).
Exploration and exploitation exhibit stronger positive
relationships with firm performance when surveys are
conducted (r = 0.237 and 0.257, respectively) than when other
research designs are conducted (r = 0.056 and 0.112,
respectively, both p < 0.01).
Performance measurement method
This study tested the moderating effects of subjective
versus objective measurements between strategies and firm
performance. In the sample studies, objective
measurements include market share, asset, ROA, growth,
ROE, Tobin’s Q, and more (e.g. cash flow). The positive
correlation between exploration and exploitation has no
 Study on exploration and exploitation Journal of Business & Industrial Marketing
Xiaofeng Shi, Lixun Su and Annie Peng Cui

Table II The univariate results

Relationship k Total N Mean r Weighted mean r Lower 95% CI Upper 95% CI Chi-square Fail-safe statistic
The relationship between exploration and exploitation
Exploration-Exploitation 105 84,208 0.353 0.380* 0.345 0.415 3340.994*** 162868
The consequences of exploration and exploitation
Exploration-Performance 203 232,577 0.168 0.166* 0.145 0.187 4714.994*** 2155
Exploitation-Performance 155 140,911 0.211 0.213* 0.185 0.240 3902.440*** 7687
The antecedents of exploration and exploitation
Firm resource-Exploration 20 9,660 0.160 0.171* 0.089 0.251 273.441*** 903
Firm capability-Exploration 36 29,491 0.208 0.207* 0.156 0.256 617.037*** 6377
Firm size-Exploration 89 29,491 0.046 0.048* 0.007 0.088 2532.576*** 2060
Firm age-Exploration 56 42,307 0.004 0.011* 0.016 0.039 320.743*** 152
Market turbulence-Exploration 35 7,605 0.119 0.121* 0.069 0.172 165.479* 853
Competitive intensity-Exploration 10 5,575 0.069 0.094* 0.006 0.180 51.679* 30
Market orientation-Exploration 14 2,483 0.240 0.236* 0.150 0.319 59.561* 408
Entrepreneurial orientation-Exploration 10 1,792 0.412 0.429* 0.291 0.549 98.981* 900
Firm resource-Exploitation 14 4,467 0.218 0.230* 0.101 0.352 232.395* 680
Firm capability-Exploitation 33 21,730 0.266 0.277* 0.187 0.362 1398.163* 8839
Firm size-Exploitation 66 34,312 0.061 0.069* 0.069 0.030 710.803* 3100
Firm age-Exploitation 49 26,212 0.026 0.038* 0.009 0.067 190.815* 456
Market turbulence-Exploitation 24 5,424 0.090 0.096* 0.069 0.122 9.166* 242
Competitive intensity-Exploitation 9 2,515 0.007 0.008 0.132 0.117 68.889* 9
Market orientation-Exploitation 12 2,111 0.233 0.223* 0.135 0.308 43.632* 249
Entrepreneurial 9 1,647 0.310 0.345* 0.127 0.531 173.938* 524
orientation -Exploitation
Notes: *p < 0.05; k: Number of studies; CI: Confidence interval

Table III Moderator analysis results

Relationship
Exploration-exploitation
Exploration-performance
Exploitation-performance
Notes: *p < 0.05; N: Sample size
Study design
Survey (N) vs other designs (N)
0.393 (75) vs 0.352 (30)
0.237 (132) vs 0.056 (71)*
0.257 (112) vs 0.112 (43)*
Performance measurements
Subjective (N) vs Objective (N)
0.388 (51) vs 0.400 (24)
0.258 (116) vs 0.058 (87)*
0.279 (100) vs 0.102 (55)*
Research context
R&D (N) vs other contexts (N)
0.331 (33) vs 0.402 (72)
0.203 (76) vs 0.144 (127)*
0.270 (54) vs 0.182 (101)*

significant differences across performance measurement
methods (r = 0.388 when subjective measurement is used
and 0.400 when objective measurement is used, p > 0.1).
Exploration and exploitation exhibit stronger positive
relationships with firm performance when subjective
measurements are used (r = 0.258 and 0.279, respectively)
than when objective measurements are used (r = 0.058 and
0.102, respectively, both p < 0.01).
Research context
This study categorized research contexts into product R&D
context and all other contexts. The positive correlation
between exploration and exploitation has no significant
differences across research contexts (r = 0.331 in R&D
settings and 0.402 in non-R&D settings, p > 0.1).
Exploitation and exploration exhibit stronger positive
relationships with firm performance in R&D settings
(r = 0.203 and 0.270, respectively) than in other settings
(r = 0.144 and 0.182, respectively, both p < 0.01).
Causal model estimation and hypotheses testing
The data used to estimate the causal model is a correlation
matrix including all variables in the model (see Table IV). The
fit indexes from the SEM estimation of the proposed model in
Figure 1 indicate that the theoretical model poorly fits to the
data: x 2 (8) = 474.973, p < 0.01; comparative fit index (CFI) =
0.846; goodness-of-fit index (GFI) = 0.983; the root mean
square error of approximation (RMSEA) = 0.112; and the
standard root mean square residual (SRMR) = 0.042.
Modification indexes suggest a direct path from market
orientation to firm performance, and the fit indexes of the
revised model indicate a good fit to the data: x 2 (7) = 173.283,
p < 0.01; CFI = 0.945; GFI = 0.993; RMSEA = 0.072; and
SRMR = 0.021. The results of SEM are provided in Table V.
The relationship between exploration and exploitation
The SEM results show that exploration and exploitation are
positively related to each other (r = 0.202, p < 0.05),
confirming H1a.
 Study on exploration and exploitation Journal of Business & Industrial Marketing
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Table IV Correlational matrix among constructs in causal model

Exploration Exploitation Resource Capability Turbulence MO EO Size Age Performance
Exploitation 0.380
SD 0.050
# of Studies 105
N 84208
Resource 0.171 0.230
SD 0.048 0.037
# of Studies 20 14
N 9600 4467
Capability 0.207 0.277 0.162
SD 0.035 0.044 0.039
# of Studies 36 33 6
N 29491 21730 2186
Turbulence 0.121 0.096 0.096 0.075
SD 0.026 0.002 0.005 0.009
# of Studies 35 24 10 13
N 7605 5424 2030 3495
MO 0.236 0.223 0.258 0.298 0.085
SD 0.025 0.030 0.006 0.049 0.021
# of Studies 14 12 2 5 4
N 2483 2111 352 1364 643
EO 0.429 0.345 0.323 0.333 0.275 0.275
SD 0.041 0.084 0.048 0.000 0.027 0.013
# of Studies 10 9 2 2 4 4
N 1792 1647 323 406 722 534
Size 0.048 0.069 0.065 0.057 0.023 0.063 0.025
SD 0.019 0.015 0.048 0.016 0.021 0.023 0.024
# of Studies 89 66 18 22 37 4 7
N 82,754 34,312 9,105 15,208 7,983 643 1,010
Age 0.048 0.038 0.078 0.034 0.003 0.022 0.096 0.241
SD 0.010 0.011 0.044 0.016 0.008 0.006 0.007 0.036
# of Studies 56 49 13 14 23 4 5 61
N 42,307 26,212 7,798 7,604 5,607 1,248 886 45,946
Performance 0.166 0.213 0.189 0.195 0.042 0.297 0.216 0.049 0.048
SD 0.041 0.043 0.047 0.028 0.014 0.020 0.035 0.015 0.019
# of Studies 203 155 29 35 49 13 12 100 63
N 232,577 140,911 11,737 17,886 9,370 2,639 2,526 111,096 43,842
Competition 0.094 0.008 0.053 0.082 0.240 0.135 0.053 0.016 0.002 0.127
SD 0.024 0.035 0.012 0.000 0.013 0.000 0.001 0.004 0.012 0.018
# of Studies 10 9 5 3 6 2 2 13 9 9
N 5,575 2,515 4,643 1,188 1,143 200 200 14,020 2,548 2,425
Notes: # of Studies: Number of studies; N: Cumulative sample size; SD: Standard Deviation; MO: Market orientation; EO: Entrepreneurial orientation

Consequences of the strategies Market turbulence is not significantly related to exploration

The results of SEM show that exploration and exploitation
positively influence firm performance ( b = 0.055 and 0.136,
respectively, both p < 0.05), confirming H2a and H3a.
Antecedents of the strategies
The results of SEM show that firm resources are not significantly
related to exploration ( b = 0.025, p = 0.074) but are positively
related to exploitation ( b = 0.109, p < 0.05). Firm capabilities
are positively related to exploration ( b = 0.031, p < 0.05) and
exploitation ( b = 0.148, p < 0.05). Firm size is positively related
to exploration ( b = 0.045, p < 0.05) and exploitation ( b =
0.068, p < 0.05). Firm age is positively related to exploration
( b = 0.078, p < 0.05) and exploitation ( b = 0.050, p < 0.05).
strategy ( b = 0.016, p = 0.246) or exploitation ( b = 0.009,
p = 0.539). Competitive intensity is positively related to
exploration strategy ( b = 0.060, p < 0.05) but negatively
related to exploitation ( b = 0.043, p < 0.05). Market
orientation is positively related to exploration ( b = 0.111,
p < 0.05) and exploitation ( b = 0.095, p < 0.05).
Entrepreneurial orientation is positively related to exploration
( b = 0.390, p < 0.05) and exploitation ( b = 0.241, p < 0.05).
The mediating effects of exploration and exploitation
Based on SEM results, we calculated the indirect effects of the
antecedents on firm performance. The results show that
exploration mediates the influence of firm size, firm age,
 Study on exploration and exploitation Journal of Business & Industrial Marketing
Xiaofeng Shi, Lixun Su and Annie Peng Cui

Table V The SEM Results

Relationship Coefficient estimation Standard error T-value
The correlation between exploration and exploitation
Exploration–Exploitation 0.202* 0.120 16.313
The influence of exploration and exploitation on firm performance
Exploration–Performance 0.055* 0.015 3.530
Exploitation–Performance 0.136* 0.015 8.808
The antecedents of exploration and exploitation
Firm resources–Exploration 0.025 0.014 1.754
Firm resources–Exploitation 0.109* 0.014 7.408
Firm capabilities–Exploration 0.031* 0.014 2.137
Firm capabilities–Exploitation 0.148* 0.014 9.960
Firm size–Exploration 0.045* 0.013 3.287
Firm size–Exploitation 0.068* 0.014 4.841
Firm age–Exploration 0.078* 0.014 5.669
Firm age–Exploitation 0.050* 0.014 3.562
Market turbulence–Exploration 0.016 0.014 -1.138
Market turbulence–Exploitation 0.009 0.014 0.603
Competitive intensity–Exploration 0.060* 0.014 4.360
Competitive intensity–Exploitation 0.043* 0.014 -3.035
Market orientation–Exploration 0.111* 0.014 7.610
Market orientation–Exploitation 0.095* 0.015 6.328
Entrepreneurial orientation–Exploration 0.390* 0.015 25.305
Entrepreneurial orientation–Exploitation 0.241* 0.015 15.281
The mediating effects of exploration and exploitation
Resources–Exploration–Performance 0.001 0.001 1.571
Capabilities–Exploration–Performance 0.002 0.001 1.828
Size–Exploration–Performance 0.002* 0.001 2.406
Age–Exploration–Performance 0.004* 0.001 2.996
Market turbulence–Exploration–Performance 0.001 0.001 -1.083
Competitive intensity–Exploration–Performance 0.003* 0.001 2.743
Market orientation–Exploration–Performance 0.006* 0.002 3.202
Entrepreneurial orientation–Exploration–Performance 0.021* 0.006 3.496
Resources–Exploitation–Performance 0.015* 0.003 5.670
Capabilities–Exploitation–Performance 0.020* 0.003 6.598
Size–Exploitation–Performance 0.009* 0.002 4.242
Age–Exploitation–Performance 0.007* 0.002 3.303
Market turbulence–Exploitation–Performance 0.001 0.002 0.602
Competitive intensity–Exploitation–Performance 0.004* 0.002 -2.870
Market orientation–Exploitation–Performance 0.013* 0.002 5.168
Entrepreneurial orientation–Exploitation–Performance 0.033* 0.004 7.631
Note: *p < 0.05

competitive intensity, market orientation, and entrepreneurial
orientation on firm performance ( b = 0.002, 0.004, 0.003,
0.006, and 0.021, respectively, all p < 0.05). Exploitation
mediates the influence of firm resources, firm capabilities, firm
size, firm age, competitive intensity, market orientation, and
entrepreneurial orientation on firm performance ( b = 0.015,
0.020, 0.009, 0.007, -0.004, 0.013, and 0.033, respectively, all
p < 0.05).
Discussion
Overview of the Meta-analysis
Primarily based on the research framework outlined by Raisch
and Birkinshaw (2008), this meta-analytic study quantitatively
synthesized the studies on two strategies: exploration and
exploitation. This study aims to answer three questions:
Q1. What is the relationship between exploration and
exploitation?
Q2. Under what circumstances do exploration and
exploitation increase or decrease firm performance? and
Q3. What factors influence exploration and exploitation,
which in turn influence firm performance?
In the following section, we answer each question.
First, our results show that exploration and exploitation
positively influence each other. Exploration focuses on
developing new products, technologies, and markets whereas
 Study on exploration and exploitation
Xiaofeng Shi, Lixun Su and Annie Peng Cui
exploitation focuses on refining current products, technologies,
and markets. In previous studies, both positive and negative
relationships between exploration and exploitation have been
revealed. By integrating previous empirical findings, this meta-
analytic study confirms the positive relationship between
exploration and exploitation. In addition, this positive
relationship is held constant across research contexts and
research designs. This finding suggests that firms could benefit
from simultaneous implementation of exploration and
exploitation due to the interactive effects between the two
strategies.
Second, both correlation and SEM results show that both
exploration and exploitation can boost firm performance. In
addition, subgroup analysis results show that exploration and
exploitation exhibit stronger relationships with firms’ subjective
performance than objective performance. Moreover,
exploration and exploitation exhibit stronger relationships with
firm performance in R&D settings than in other research
settings. Finally, we find that the influences of exploration and
exploitation on firm performance are stronger when survey
research is used than when other research designs are used.
Third, SEM results show that exploration is positively
influenced by firm capabilities, firm size, firm age, competitive
intensity, market orientation, and entrepreneurial orientation,
but it is not influenced by firm resources or market turbulence.
Exploitation is positively influenced by firm resources, firm
capability, firm size, firm age, market orientation and
entrepreneurial orientation but negatively influenced by
competitive intensity, and it is not influenced by market
turbulence. Interestingly, the results show that firm resources
do not significantly influence exploration but do positively
influence exploitation. These counterintuitive results might be
because firms’ current resources only promote firms to exploit
the resources further instead of striving for new resources.
Finally, our findings show that firm size, firm age,
competitive intensity, market orientation and entrepreneurial
orientation influence performance through both exploration
and exploitation, and firm resources and firm capabilities
influence firm performance only through exploration.
Theoretical implications
First, our findings suggest a positive relationship between
exploration and exploitation. Even though some scholars posit
that exploration and exploitation might impede each other
because the two strategies dilute firms’ resources and demand
different capabilities (March, 1991), our findings show that
exploration and exploitation are positively related to each other.
This could be partly because exploration and exploitation can
complement each other. For example, the profits from one
strategy can be used to develop and improve the other strategy.
This could also be partly due to the fact that most firms tend to
implement exploration and exploitation simultaneously in
order to gain competitive advantages. Based on resource-based
view theory, firms can gain competitive advantages by
possessing a set of inseparable and interdependent resources
because they are more inimitable for competitors (Barney,
1991; Vorhies and Morgan, 2005). In this sense, simultaneous
implementation of exploration and exploitation might
Journal of Business & Industrial Marketing
constitute inimitable resources because competitors have
difficulty assessing which strategy brings profits for focal firms.
Regardless, the positive relationship between exploration and
exploitation encourages researchers to reconsider the
measurement of organizational ambidexterity. Organizational
ambidexterity refers to a high level of both exploration and
exploitation, and some studies use the sum of exploration and
exploitation to measure organizational ambidexterity. If the
positive relationship between exploration and exploitation
exists, the sum method might underestimate the extent of
organizational ambidexterity because the interactive effects of
exploration and exploitation are not captured by the sum.
Second, we offer empirical evidence for the positive influence
of exploration and exploitation on firm performance,
reconciling the conflicting results in previous studies.
Specifically, some studies have found that a sole focus on
exploration or exploitation increases performance, whereas
others have found that it hurts firm performance (Gupta et al.,
2006; Junni et al., 2013; Lisboa et al., 2013). More
complicatedly, some studies have found that firms should
deploy exploration and exploitation simultaneously, whereas
others have found that firms should not do so (Andriopoulos
and Lewis, 2009; Junni et al., 2013; Lavie and Rosenkopf,
2006; Vorhies et al., 2011; Zhang et al., 2015). By integrating
previous empirical results, we find that both exploration and
exploitation positively influence firm performance. In light of
the positive relationship between exploration and exploitation
and their positive influences on firm performance, our results
suggest that implementing two strategies simultaneously might
help boost firm performance instead of hurting performance.
Additionally, our findings show that exploration and
exploitation have stronger influences on firm performance in
R&D contexts rather than in other contexts, when surveys are
conducted rather than when other research methods are used,
and when subjective measurements were used rather than
objective measurement were used. The results indicate that
exploration and exploitation influence different aspects of firm
performance. For example, in the sample studies included in
this meta-analytic study, subjective measurements often
emphasize the comparison between focal firms and their
competitors, but objective measurements emphasize firms’
financial performance. Therefore, exploration and exploitation
might help firms more with gaining competitive advantages
over competitors than with achieving financial successes.
Third, our structural model analysis demonstrated
mediating roles of exploration and exploitation between firm
performance and firm resources, firm capabilities, firm size,
firm age, competitive intensity, market orientation and
entrepreneurial orientation. The results help researchers
understand how the factors within and outside firms influence
firm performance through exploration and exploitation.
Though previous studies have separately tested a number of
antecedents of exploration and exploitation, to the best of our
knowledge, our study is the first paper to represent preliminary
efforts to synthesize these antecedents in one research model
and examine how exploration and exploitation mediate
the relationship between these constructs and firm
performance. Based on the comprehensive model, we provide
some alternative insight for the long-held relationship. For
example, it is universally held that firms are more likely to
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Xiaofeng Shi, Lixun Su and Annie Peng Cui
undertake exploration, as firms possess more resources.
However, our findings did not support the notion. In sum, our
results encourage researchers to reassess what factors influence
exploration and exploitation and how the influences occur.
Managerial implications
The choice between exploration and exploitation is an
important but difficult task for all firms. Even though many
scholars are devoted to developing theories to provide insight
for firms to make appropriate decisions, the conflicting results
in the literature provide only limited assistance for strategy
decision makers.
Through synthesizing the extant research in this area, we
find that exploration and exploitation are both positively
related to firm performance. The results suggest that firms
could simultaneously use exploration and exploitation
strategies to achieve better performance when feasible. In
practice, on one hand, most firms do not have problems in
deploying exploitation because exploitation involves only
minimal risks and costs and could immediately bring certain
profits. However, many firms do not proactively engage in
exploration because of its high costs, difficulties, and
uncertainty. We acknowledge that both product and market
exploration involve high costs, but our results show that high
inputs of exploration will finally pay off. Notably, some
behemoths disappeared because of their reluctance to
explore new markets or new products. Therefore, firms
should continuously exploit the current resources and
explore new opportunities to obtain long-lasting success. On
the other hand, some firms, especially high-tech firms,
overemphasize exploration and somehow ignore
maintaining existing markets. For example, some high-tech
firms stop providing maintenance services for old products
after launching or upgrading to new products. Our findings
show that ignorance of either exploration or exploitation
could hurt firm performance.
In addition, our results suggest that exploration and
exploitation are positively correlated with each other.
Therefore, firms might be able to gain multiplicative benefits
from simultaneously implementing exploration and
exploitation. The findings also indicate that high costs
and difficulties of simultaneously implementing exploration
and exploitation might be overestimated and overemphasized
in previous studies. Previous studies have emphasized that
exploration and exploitation demand different firm resources
and capabilities, increasing the costs and difficulties of
simultaneous utilization of exploration and exploitation. The
positive relationship between exploration and exploitation
uncovered in this study implies that some investments on
exploration might be able to facilitate exploitation, or vice
versa. Therefore, the amount of investments on simultaneous
implementation of exploration and exploitation may not be as
big as most firms think. These findings confirm our arguments
above that firms should simultaneously implement exploration
and exploitation.
Moreover, competitive intensity, market orientation and
entrepreneurial orientation influence firm performance
through exploration and exploitation. Therefore, firms should
deepen the extent of exploration and exploitation to achieve a
Journal of Business & Industrial Marketing
better performance based on the changes in the competitive
environments and strategic decision-making styles. In other
words, firms should coordinate external environments,
decision-making styles, and strategies to achieve better
performance. For example, the results show that firm
capabilities influence firm performance through both
exploration and exploitation. Therefore, when firms have
strong capabilities, they might benefit more from implementing
ambidexterity (i.e. both exploration and exploitation) than
pursuing a focus on either exploration or exploitation.
Another interesting finding is that firm resources do not
influence exploration but rather exploitation. To some extent,
the results indicate that firms are not prone to exploring
something new even though they have sufficient resources.
Firm inertia theory provides insight for this finding.
Specifically, when firms benefit from current strategies,
processes and resources, they are less likely to try something
new to avoid risks and to prevent current resources from
potential perils. In this sense, resourceful firms might tend to
focus on exploitation and enjoy the benefits from the current
resources. Given the positive influence of exploration on firm
performance, we suggest that resourceful firms should use
more exploration since they have available resources for
exploration.
Limitations and future research
Like all meta-analysis studies, we risk the possibility of
overlooking studies. In this study, we attempt to include all
papers that have been published in this area. However, it is still
possible that some studies, especially unpublished studies, are
not included in this meta-analytic study.
Another limitation is that the antecedents included in the
proposed model are only a subset of all the potential variables
because of data unavailability. Future research should include
more antecedents (e.g. technology turbulence) in the model to
more comprehensively test the influences of marketing
elements on exploration and exploitation as more papers are
published.
Moreover, we did not investigate whether focal relationships
vary by other moderators such as the extent of firms’
internationalization status. Specifically, international firms and
domestic firms face different challenges when they are adopting
exploration or exploitation. Since most studies did not specify
whether sample firms are international or domestic, we were
not able to test this moderator.
Another future research direction is how markets
influence firms’ strategy adoption. This study shows that
market turbulence does not influence exploration or
exploitation. On the contrary, market orientation positively
influences both exploration and exploitation. The results
imply that it is firms’ mindsets about the importance of
market intelligence instead of capabilities on collecting and
processing market intelligence that determine firms’ choices
of strategies. Since the capabilities and mindsets are
intertwined, future research should investigate how market
intelligence influences firms’ choices between exploration
and exploitation
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References

Represents sample studies included in the meta-analysis.

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Xiaofeng Shi, Lixun Su and Annie Peng Cui

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Xiaofeng Shi, Lixun Su and Annie Peng Cui
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 Study on exploration and exploitation
Xiaofeng Shi, Lixun Su and Annie Peng Cui
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Further reading

Ahmadi, H. and O’Cass, A. (2016), “The role of
entrepreneurial marketing in new technology ventures first
product commercialisation”, Journal of Strategic Marketing,
Vol. 24 No. 1, pp. 47-60.

Atuahene-Gima, K. (2005), “Resolving the capability–rigidity
paradox in new product innovation”, Journal of Marketing,
Vol. 69 No. 4, pp. 61-83.

Audia, P.G. and Goncalo, J.A. (2007), “Past success and
creativity over time: a study of inventors in the hard disk drive
industry”, Management Science, Vol. 53 No. 1, pp. 1-15.

Belderbos, R., Faems, D., Leten, B. and Looy, B.V. (2010),
“Technological activities and their impact on the financial
performance of the firm: exploitation and exploration within
and between firms”, Vol. 27 No. 6, pp. 869-882.
 external knowledge sources and organizational design in the
Bierly, P.E. III and Daly, P.S. (2007), “Alternative knowledge
strategies, competitive environment, and organizational
performance in small manufacturing firms”, Entrepreneurship
Theory and Practice, Vol. 31 No. 4, pp. 493-516.
 shareholdings and organizational ambidexterity in high-tech
Bierly, I.I.I., P.E., Damanpour, F. and Santoro, M.D. (2009),
“The application of external knowledge: organizational
conditions for exploration and exploitation”, Journal of
Management Studies, Vol. 46 No. 3, pp. 481-509.
 and van den Oord, A. (2008), “Network embeddedness and
Blindenbach-Driessen, F. and den Ende, J.V. (2014), “The
locus of innovation: the effect of a separate innovation unit
on exploration, exploitation, and ambidexterity in
manufacturing and service firms”, Journal of Product
Innovation Management, Vol. 31 No. 5, pp. 1089-1105.

Calantone, R. and Rubera, G. (2012), “When should RD&E
and marketing collaborate? the moderating role of
exploration–exploitation and environmental uncertainty”,
Journal of Product Innovation Management, Vol. 29 No. 1,
pp. 144-157.

Cao, Q., Simsek, Z. and Zhang, H. (2010), “Modelling the
joint impact of the CEO and the TMT on organizational
ambidexterity”, Journal of Management Studies, Vol. 47
No. 7, pp. 1272-1296.
 
Cepeda-Carri on, I., Leal-Millán, A.G., Ortega-Gutierrez, J.
and Leal-Rodriguez, A.L. (2015), “Linking unlearning with
service quality through learning processes in the spanish
banking industry”, Journal of Business Research, Vol. 68
No. 7, pp. 1450-1457.

Chandrasekaran, A., Linderman, K. and Schroeder, R.
(2012), “Antecedents to ambidexterity competency in high
technology organizations”, Journal of Operations
Management, Vol. 30 No. 1-2, pp. 134-151.

Chang, Y.Y. and Hughes, M. (2012), “Drivers of innovation
ambidexterity in small- to medium-sized firms”, European
Management Journal, Vol. 30 No. 1, pp. 1-17.

Choi, B., Kumar, M.S. and Zambuto, F. (2016), “Capital
structure and innovation trajectory: the role of debt in
balancing exploration and exploitation”, Organization
Science, Vol. 27 No. 5, pp. 1183-1201.

Dai, Y., Du, K., Byun, G. and Zhu, X. (2017),
“Ambidexterity in new ventures: the impact of new product
Journal of Business & Industrial Marketing
development alliances and transactive memory systems”,
Journal of Business Research, Vol. 75, pp. 77-85.

Danneels, E. and Sethi, R. (2011), “New product exploration
under environmental turbulence”, Organization Science,
Vol. 22 No. 4, pp. 1026-1039.

Douglas, T.J. and Judge, W.Q. (2001), “Total quality
management implementation and competitive advantage:
the role of structural control and exploration”, Academy of
Management Journal, Vol. 44 No. 1, pp. 158-169.

Dunlap, D., McDonough, I.I.I., E.F., Mudambi, R. and
Swift, T. (2016), “Making up is hard to do: knowledge
acquisition strategies and the nature of new product
innovation”, Journal of Product Innovation Management,
Vol. 33 No. 4, pp. 472-491.

Fernhaber, S.A. and Patel, P.C. (2012), “How do young firms
manage product portfolio complexity? the role of absorptive
capacity and ambidexterity”, Strategic Management Journal,
Vol. 33 No. 13, pp. 1516-1539.

Foss, N.J., Lyngsie, J. and Zahra, S.A. (2013), “The role of
process of opportunity exploitation”, Strategic Management
Journal, Vol. 34 No. 12, pp. 1453-1471.

Gedajlovic, E., Cao, Q. and Zhang, H. (2012), “Corporate
SMEs: evidence from a transitional economy”, Journal of
Business Venturing, Vol. 27 No. 6, pp. 652-665.

Gilsing, V., Nooteboom, B., Vanhaverbeke, W., Duysters, G.
the exploration of novel technologies: technological distance,
betweenness centrality and density”, Research Policy, Vol. 37
No. 10, pp. 1717-1731.

Groysberg, B. and Lee, L.E. (2009), “Hiring stars and their
colleagues: exploration and exploitation in professional
service firms”, Organization Science, Vol. 20 No. 4,
pp. 740-758.

Guan, J. and Liu, N. (2016), “Exploitative and exploratory
innovations in knowledge network and collaboration
network: a patent analysis in the technological field of nano-
energy”, Research Policy, Vol. 45 No. 1, pp. 97-112.

Gurtner, S. and Reinhardt, R. (2016), “Ambidextrous idea
generation – antecedents and outcomes”, Journal of Product
Innovation Management, Vol. 33 No. 1, pp. 34-54.
He, Z.L. and Wong, P.K. (2004), “Exploration vs.
exploitation: an empirical test of the ambidexterity
hypothesis”, Organization Science, Vol. 15 No. 4,
pp. 481-494.

Hill, S.A. and Birkinshaw, J. (2014), “Ambidexterity and
survival in corporate venture units”, Journal of Management,
Vol. 40 No. 7, pp. 1899-1931.

Hsu, C.W., Lien, Y.C. and Chen, H. (2013), “International
ambidexterity and firm performance in small emerging
economies”, Journal of World Business, Vol. 48 No. 1,
pp. 58-67.

Hughes, M., Martin, S.L., Morgan, R.E. and Robson, M.J.
(2010), “Realizing product-market advantage in high-
technology international new ventures: the mediating role of
ambidextrous innovation”, Vol. 18 No. 4, pp. 1-21.

Im, G. and Rai, A. (2008), “Knowledge sharing ambidexterity
in long-term interorganizational relationships”, Management
Science, Vol. 54 No. 7, pp. 1281-1296.
 Study on exploration and exploitation
Xiaofeng Shi, Lixun Su and Annie Peng Cui

Jansen, J.J.P., Kostopoulos, K.C., Mihalache, O.R. and
Papalexandris, A. (2016), “A socio-psychological
perspective on team ambidexterity: the contingency role of
supportive leadership behaviours”, Journal of Management
Studies, Vol. 53 No. 6, pp. 939-965.

Jansen, J.J., Simsek, Z. and Cao, Q. (2012), “Ambidexterity
and performance in multiunit contexts: cross-level
moderating effects of structural and resource attributes”,
Strategic Management Journal, Vol. 33 No. 11,
pp. 1286-1303.
 
Jansen, J.J.P., Tempelaar, M.P., Van den Bosch, F.A. and
Volberda, H.W. (2009), “Structural differentiation and
ambidexterity: the mediating role of integration
mechanisms”, Organization Science, Vol. 20 No. 4,
pp. 797-811.

Jansen, J.J., Vera, D. and Crossan, M. (2009), “Strategic
leadership for exploration and exploitation: the moderating
role of environmental dynamism”, The Leadership Quarterly,
Vol. 20 No. 1, pp. 5-18.

Josephson, B.W., Johnson, J.L. and Mariadoss, B.J. (2016),
“Strategic marketing ambidexterity: antecedents and
financial consequences”, Journal of the Academy of Marketing
Science, Vol. 44 No. 4, pp. 539-554.

Kammerlander, N., Burger, D., Fust, A. and Fueglistaller, U.
(2015), “Exploration and exploitation in established small
and medium-sized enterprises: the effect of CEOs’
regulatory focus”, Journal of Business Venturing, Vol. 30
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Corresponding author
Xiaofeng Shi can be contacted at: shixf@nau.edu.cn