The moderating effects of home region orientation on R&D investment and international SME performance: Lessons from Korea

SummaryDrawing from the resource-based view, we investigate how firm and country combinations affect international SME performance. Using a sample of 2676 international Korean SMEs, we explore the relationships among SME R&D investment, home region orientation and financial performance. Results show that R&D investment has a horizontally inverted S-shaped relationship with performance reflecting cost leadership, stuck in the middle, and differentiation strategies. We also find that a home region orientation moderates the relationship between R&D investment and performance. Home region orientation positively moderates the relationship when R&D investment reflects cost leadership or differentiation but negatively moderates a stuck in the middle strategy.