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- W3106290583 abstract "Purpose This study aims to clarify how companies should manage exploration and exploitation in the long term, and particularly whether companies should dynamically change their resource allocation related to exploration and exploitation activities. Design/methodology/approach To demonstrate the effect of shifts in focus between exploration and exploitation on financial performance and market evaluation, an empirical examination was conducted using secondary panel data for Japanese manufacturers from 2000 to 2014, which was analyzed by fixed-effect estimation with a control function approach considering the problem of endogeneity. Findings The empirical results suggest that companies should change their resource allocation related to exploration and exploitation in the long term. Long-term focus shifts between exploration and exploitation activities enhance not only future financial performance (return on assets and return on sales), but also future market evaluations (Tobin’s Q). Research limitations/implications This paper showed a pathway connecting technological knowledge searches to the company’s future performance. With reference to the discussion of existing research, it remains unclear what kind of management is required for company activities related to exploration and exploitation. This study showed that companies can improve their profitability and market evaluations by changing their resource allocation for exploration and exploitation activities over time. Originality/value While most research on exploration and exploitation is from a static perspective, this study simultaneously incorporated focus balance and focus shifts into the empirical model and thereby examined exploration and exploitation from a dynamic perspective. Even when considering the effects of balancing exploration and exploitation, this study confirmed that organizational vacillation will improve financial performance and market evaluation." @default.
- W3106290583 created "2020-11-23" @default.
- W3106290583 creator A5022489250 @default.
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- W3106290583 date "2020-11-16" @default.
- W3106290583 modified "2023-09-23" @default.
- W3106290583 title "Dynamic resource allocation between exploration and exploitation" @default.
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- W3106290583 doi "https://doi.org/10.1108/mrr-05-2020-0264" @default.
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