This study examines when high tech firms are better off specializing in either exploration or exploitation learning strategy. Drawing on the organizational learning literature, we hypothesize that a firm’s imbalance between exploration and exploitation (or specialization strategy) has differential impacts on firm performance depending on its structural characteristics and external environment. A survey data of 180 high tech firms in China shows that firm age and scarcity of R&D resources moderate the relationship between specialization and business performance. Moreover, specialization strategy works better when competitive intensity is low.

• Jie Wu(University of Macau, China)
• Siaoyun Chen(University of Macau, China)