Too small to do it all? A meta-analysis on the relative relationships of exploration, exploitation, and ambidexterity with SME performance

We tailor theory on the relative performance implications of exploration, exploitation, and ambidexterity to the unique characteristics of small and medium-sized enterprises (SMEs). First, as SMEs’ limited resources make it unclear whether ambidexterity is superior to exploration or exploitation in SMEs, we investigate their relative effects on SME performance. Second, as SMEs’ resource and particularly knowledge constraints make property rights protection (PRP) pertinent to these firms, we examine PRP as a moderator. Consistent with our hypotheses, meta-analytical evidence from 5,488 SMEs across 34 studies suggests that: (1) ambidexterity has a less positive relationship with SME performance than both exploration and exploitation and (2) PRP decreases the positive relationship between exploration and SME performance. Unexpectedly, PRP decreases the positive relationship between exploitation and SME performance. Building on our findings, we develop a roadmap for SME-specific research, focusing on sequential switching between exploration and exploitation and contingency factors of the direct relationships.