R&D exploration or exploitation? How firms respond to import competition
Do firms respond to tougher competition by searching for completely new technological solutions (exploration), or do they work to defend their position by improving current technologies (exploitation)?
Competition from increased import penetration generally results in tight profit margins, low prices, and strong efficiency pressures, immediately affecting firms' bottom lines in the form of reduced profits and increased bankruptcy risk.
A firm's R&D strategy is one of the fundamental determinants of success or failure when responding to competitive threats. To ensure both short-term performance and long-term survival, firms have two basic R&D options: explore new knowledge or exploit existing knowledge bases. ...











