Effectiveness Difference between Resources and Capabilities in Foreign Markets Performance of SME

This study conducted an empirical analysis of an antecedent factor of foreign market entry performance of Korean SMEs by dividing them into resource characteristics and capability characteristics. The previous literature on resource-based perspective, innovation capability, and market orientation were reviewed as a theoretical background for the study. Based on this, the difference between innovation and market-oriented activities was divided into a mediating effect. Eight hypotheses were set, including mediating effects, and the partial least square (PLS) analysis was used, one of the structural equation models. Twenty measurement items for five latent variables were set according to the existing studies, and the hypothesis test was conducted on 398 samples. The empirical analysis showed that innovation resources had a positive impact on both innovation activities and foreign market performance. Market-oriented resources were found to have a positive impact on market-oriented activities, but they didn't show any significant effect on the performance of foreign markets. Also, market-oriented activities were having a positive impact on the performance of foreign markets. Also, market-oriented activities were having a positive impact on the performance of foreign markets, whereas innovative activities didn't have a significant effect on the performance of foreign markets. These results show that Korean SMEs focus on market-oriented activities that help them to create short term results rather than innovative activities that should expect long term effects. The theoretical and practical implications were discussed based on the results of the empirical analysis, and the limitations of the study and future research directions were suggested.