Research Aims: This study investigates the mediating role of functional conflict in explaining the effect of market orientation on the absorptive capacity of small and medium enterprises (SME) exporters in emerging markets.

Design/Methodology/Approach: The data were successfully collected from 124 respondents and tested using structural equation modelling via Smart-PLS.

Research Findings: The results support the notion that responsive market orientation and proactive market orientation positively influence absorptive capacity. In addition, functional conflicts serve as a quasi-mediator in the relationship between responsive market orientation and absorptive capacity.

Theoretical Contribution/Originality: The export competitiveness of SMEs is the output of intangible assets of external knowledge. The ability to identify the relevant knowledge, disseminate that knowledge within the organisation and transform it into valuable products or services is pertinent. Nevertheless, firms vary in terms of the ability to develop absorptive capacity. Accordingly, previous research investigates the antecedent of absorptive capacity, but very few have looked at the role of market orientation and the conditions that influence the relationship.

Managerial Implications in the South East Asian Context: Interaction with foreign importers affects SME knowledge development. Functional conflict requires open dialogues to develop meaningful outputs; as such, SMEs in South East Asia should aim to build good connections with their overseas importers.

Research Limitations & Implications: The limitations of this study include the small sample size, the external condition of Covid-19 that was not included in this study and the cross-sectional approach of data collection which did not capture the dynamic nature of the firm’s capability.


Acedo, F. J., Coviello, N., & Agusti, M. (2021). Caution ahead! The long-term effects of initial export intensity and geographic dispersion on INV development. Journal of World Business, 56(6).

Akgün, A. E., & Polat, V. (2022). Strategic orientations, marketing capabilities and innovativeness: an adaptive approach. Journal of Business & Industrial Marketing, 37(4), 918-931.

Aliasghar, O., Rose, E. L., & Chetty, S. (2019). Building absorptive capacity through firm openness in the context of a less open country. Industrial Marketing Management, 83, 81-93.

Aliasghar, O., Sadeghi, A., & Rose, E. L. (2023). Process innovation in small- and medium-sized enterprises: The critical roles of external knowledge sourcing and absorptive capacity. Journal of Small Business Management, 61(4), 1583-1610.

Atuahene-Gima, K., Slater, S. F., & Olson, E. M. (2005). The Contingent Value of Responsive and Proactive Market Orientations for New Product Program Performance*. Journal of Product Innovation Management, 22(6), 464-482.

Aykol, B., & Leonidou, L. G. (2018). Export-importer business relationships: Past empirical research and future. International Business Review, 27, 1007-1021.

Bhattarai, C. R., Kwong, C. C. Y., & Tasavori, M. (2019). Market orientation, market disruptiveness capability and social enterprise performance: An empirical study from the United Kingdom. Journal of Business Research, 96(March), 47-60.

Bıçakcıoğlu-Peynirci, N., & İpek, İ. (2020). Export market orientation and its consequences: a meta-analytic review and assessment of contextual and measurement moderators. Journal of Business & Industrial Marketing, 35(5), 939-954.

Boso, N., Annan, J., Adeleye, I., Iheanachor, N., & Narteh, B. (2018). Examining the Paths from Export Strategic Orientations to Export Performance: The Mediating Role of Export Resource Transformation Capability. Thunderbird International Business Review, 60(2), 207-230.

Boso, N., Cadogan, J. W., & Story, V. M. (2012). Entrepreneurial orientation and market orientation as drivers of product innovation success: A study of exporters from a developing economy. International Small Business Journal, 31(1).

Camison, C., & Fores, B. (2010). Knowledge absorptive capacity: new insights for its conceptualization and measurement. Journal of Business Research, 63(7), 707-715.

Chaudhary, S., Sangroya, D., Arrigo, E., & Cappiello, G. (2022). The impact of market orientation on small firm performance: a configurational approach. International Journal of Emerging Markets, ahead-of-print(ahead-of-print).

Chen, Y.-S., Lin, M.-J. J., & Chang, C.-H. (2009). The positive effects of relationship learning and absorptive capacity on innovation performance and competitive advantage in industrial markets. Industrial Marketing Management, 38(2), 152-158.

Cohen, W. M., & Levinthal, D. A. (1990). Absorptive Capacity: A New Perspective on Learning and Innovation. Administrative Science Quarterly, 35(1), 128-152.

Crick, J. M., & Crick, D. (2022). Coopetition and international entrepreneurship: the influence of a competitor orientation. International Journal of Entrepreneurial Behavior & Research, 28(3), 801-828.

Cuervo-Cazurra, A., & Rui, H. (2017). Barriers to absoprtive capacity in emerging market firms. Journal of World Business, 52(6), 727-772.

Day, G. S. (1994). The capabilities of market-driven organizations. Journal of Marketing, 58(4), 37-52.

De Clercq, D., Thongpapanl, N., & Dimov, D. (2009). When good conflict gets better and bad conflict becomes worse: The role of social capital in the conflict-innovation relationship. Journal of the Academy of Marketing Science, 37, 283-297.

Eibe Sørensen, H. (2009). Why competitors matter for market orientation. European Journal of Marketing, 43(5/6), 735-761.

Evangelista, F., & Mac, L. (2016). The influence of experience and deliberate learning on SME export performance. International Journal of Entrepreneurial Behavior & Research, 22(6), 860-879.

Flatten, T. C., Engelen, A., Zahra, S. A., & Brettel, M. (2011). A measure of absorptive capacity: scale development and validation. European Management Journal, 29(2), 98-116.

Franca, A., & Rua, O. L. (2017). Contributions of absorptive capability to export performance. Periodica Polytechnica Social and Management Sciences, 25(2), 150-157.

Hagemeister, M., & Rodriguez-Castellanos, A. (2010). Organizational capacity to absorb external R&D: Industrial differences in assessing intellectual capital drivers. Knowledge Management Research and Practice, 8(2), 102-111.

Hodgkinson, I. R., Hughes, P., & Hughes, M. (2012). Absorptive capacity and market orientation in public service provision. Journal of Strategic Marketing, 20(3), 211-229.

Hong, P., Jagani, S., Pham, P., & Jung, E. (2023). Globalization orientation, business practices and performance outcomes: an empirical investigation of B2B manufacturing firms. Journal of Business & Industrial Marketing, ahead-of-print(ahead-of-print).

Hoque, M. T., Ahammad, M. F., Tzokas, N., Tarba, S., & Nath, P. (2022). Eyes open and hands on: Market knowledge and marketing capabilities in export markets. International Marketing Review, 39(3).

Ipek, I., & Bicakcioglu-Peynirci, N. (2020). Export market orientation: An integrative review and directions for future research. International Business Review, 29(4).

İpek, İ., & Tanyeri, M. (2021). Home country institutional drivers and performance outcomes of export market orientation: the moderating role of firm resources. International Journal of Emerging Markets, 16(4), 806-836.

Ismail, M. D., & Isa, M. A. M. (2021). Export performance of SMEs in emerging markets: The role of market orientation, learning and trust. The South East Asian Journal of Management, 15(1), 112-128.

Jansen, J. J. P., Van Den Bosch, F. A. J., & Volberda, H. W. (2005). Managing potential and realized absorptive capacity: how do organizatioal antecedents matter? Academy of Management Journal, 48(6), 999-1015.

Jaworski, B. J., & Kohli, A. K. (1993). Market Orientation: Antecedents and Consequences. Journal of Marketing, 57(3), 53-70.

Jean, R. B., Kim, D., Chiou, J.-S., & Calantone, R. (2018). STrategic orientations, joint learning, and innovation generation in international customer-supplier relationships. International Business Review, 27, 838-851.

Jehn, K. A., & Chatman, J. A. (2000). The influence of propotional and perceptual conflict composition on team performance. International Journal of Conflict Management, 11(1), 56-73.

Jehn, K. A., & Mannix, E. A. (2001). The dynamic nature of conflict- a longitudinal study of intragroup conflict and group performance. The Journal of the Academy of Management, 44(2), 238-251.

Julian, C. C., Mohamad, O., Ahmed, Z. U., & Sefnedi, S. (2014). The market-orientation performance relationship: The empirical link in export ventures. Thunderbird International Business Review, 56(1), 97-110.

Kazemian, S., Djajadikerta, H. G., Trireksani, T., Mohd-Sanusi, Z., & Alam, M. M. (2022). Corporate governance and business performance of hotels in Western Australia: analysis of market orientation as a mediator. Business Process Management Journal, 28(3), 585-605.

Ketchen, D. J. J., Hult, T. G. M., & Slater, S. F. (2007). Toward greater understanding of market orientation and the resource-based view. Strategic Management Journal, 28, 961-964.

Kirca, A. H., Jayachandran, S., & Bearden, W. O. (2005). Market orientation: a meta-analytic review and assessment of its antecedents and impact on performance. Journal of Marketing, 69(2), 24-41.

Kohli, A. K., & Jaworski, B. J. (1990). Market Orientation: The Construct, Research Propositions, and Managerial Implications. Journal of Marketing, 54(2), 1-18.

Kohtamaki, M., Heimonen, J., Sjodin, D., & Heikkila, V. (2020). Strategic agility in innovation: Unpacking the interaction between entrepreneurial orientation and absorptive capacity by using practice theory. Journal of Business Research, 118, 12-25.

Kostopoulos, K., Papalexandris, A., Papachroni, M., & Ioannou, G. (2011). Absorptive capacity, innovation, and financial performance. Journal of Business Research, 64(12), 1335-1343.

Kowalik, I., Danik, L., & Pleśniak, A. (2022). Entrepreneurial marketing orientation of the Polish and Finnish SMEs and its environmental determinants. Journal of Business & Industrial Marketing, 37(13), 167-181.

Lamore, P. R., Berkowitz, D., & Farrington, P. A. (2013). Proactive/responsive market orientation and marketing-research and development integration. Journal of Product Innovation Management, 30(4), 695-711.

Lane, P. J., Koka, B. R., & Pathak, S. (2006). The reification of absorptive capacity: a critical review and rejuvenation of the construct. Academy of Management Review, 31(4), 833-863.

Li, C. R., Lin, C. J., & Chu, C. P. (2008). The nature of market orientation and the ambidexterity of innovations. Management Decision, 46(7), 1002-1026.

Lichtenthaler, U. (2009). Absorptive Capacity, Environmental Turbulence, and the Complementarity of Organizational Learning Processes. The Academy of management Journal, 52(4), 822-846.

Lichtenthaler, U. (2016). Determinants of absorptive capacity: the value of technology and market orientation for external knowledge acquisition. Journal of Business & Industrial Marketing, 31(5), 600-610.

Madsen, T. K., Sørensen, H. E., & Torres-Ortega, R. (2015). The Market Orientation of Domestic and International New Ventures. In Entrepreneurship in International Marketing (Vol. 25, pp. 21-44). Bingley, West Yorkshire: Emerald Group Publishing Limited.

Malhotra, A., Gosain, S., & Sawy, O. A. E. (2005). Absorptive capacity configurations in supply chains: Gearing for partner-enabled market knowledge creation. MIS Quarterly, 29(1), 145-187.

Massey, G. R., & Dawes, P. L. (2007). The antecedents and consequence of functional and dysfunctional conflict between Marketing Managers and Sales Managers. Industrial Marketing Management, 36(8), 1118-1129.

McClure, R. E. (2010). The influence of organizational culture and conflict on market orientation. Journal of Business & Industrial Marketing, 25(7), 514-524.

Mejri, K., Mac-Vaugh, J. A., & Tsagdis, D. (2018). Knowledge configurations of small and medium-sized knowledge-intensive firms in a developing economy: A knowledge-based view of business-tobusiness internationalization. Industrial Marketing Management, 71, 160-170.

Menon, A., Bharadwaj, S. G., & Howell, R. (1996). The quality and effectiveness of marketing strategy - Effects of functional and dysfunctional conflict in intraorganizational relationships. Academy of Marketing Science, 24(4), 299-313.

Montani, F., & Staglianò, R. (2022). Innovation in times of pandemic: The moderating effect of knowledge sharing on the relationship between COVID-19-induced job stress and employee innovation. R&D Management, 52(2), 193-205.

Narver, J. C., & Slater, S. F. (1990). The Effect of a Market Orientation on Business Profitability. Journal of Marketing, 54(4), 20-35.

Narver, J. C., Slater, S. F., & MacLachlan, D. L. (2004). Responsive and Proactive Market Orientation and New-Product Success*. Journal of Product Innovation Management, 21(5), 334-347.

Noblet, J. P., Simon, E., & Parent, R. (2011). Absorptive capacity: A proposed operationalization. Knowledge Management Research and Practice, 9(4), 367-377.

Osorio Tinoco, F. F., Hernández-Espallardo, M., & Rodriguez-Orejuela, A. (2020). Nonlinear and complementary effects of responsive and proactive market orientation on firms’ competitive advantage. Asia Pacific Journal of Marketing and Logistics, 32(4), 841-859.

Pfajfar, G., Shoham, A., Brencic, M. M., Koufopoulos, D., Katsikeas, C. S., & Mitrega, M. (2019). Power source drivers and performance outcomes of functional and dysfunctional conflict in exporter–importer relationships. Industrial Marketing Management, 78(April), 213-226.

Phuong, L. N., Tuan, K. C., Duc, N. N., & Thi, U. N. (2022). The impact of absorption capability, innovation capability and branding capability on firm performance- An empirical study on Vietnamese retail firms. Sustainability, 14(11).

Prasad, B., & Junni, P. (2017). Understanding top management team conflict, environmental uncertainty and firm innovativeness: Empirical evidence from India. International Journal of Conflict Management, 28(1), 122-143.

Randhawa, K., Wilden, R., & Gudergan, S. (2021). How to innovate toward an ambidextrous business model? The role of dynamic capabilities and market orientation. Journal of Business Research, 130, 618-634.

Roberts, N., Galluch, P., Dinger, M., & Grover, V. (2012). Absorptive capacity and information systems research: Review, sysnthesis, and direction for future research. MIS Quarterly, 36(2), 625-648.

Rua, O. L. (2018). From intangible resources to export performance: exploring the mediating effect of absorptive capabilities and innovation. Review of International Business and Strategy, 28(3-4), 373-394.

Sancho-Zamora, R., Hernandez-Perlines, F., Pena-Garcia, I., & Gutierrez- Broncano, S. (2022). The impact of absorptive capacity on innovation: The mediating role of organizational learning. International Journal of Environmental Research and Public Health, 19(2).

Shekhar, & Valeri, M. (2023). Trends in knowledge management research in small businesses. European Business Review, 35(5), 573-599.

Sinkula, J. M. (1994). Market information processing and organizational learning. Journal of Marketing, 58(1), 35-45.

Skarmeas, D. (2006). The role of functional conflict in international buyer–seller relationships: Implications for industrial exporters. Industrial Marketing Management, 35(5), 567-575.

Slater, S. F., Mohr, J. J., & Sengupta, S. (2010). Market Orientation. In Wiley International Encyclopedia of Marketing. Hoboken, New Jersey: Wiley, Blackwell Publishing (Holdings) Ltd.

Slater, S. F., & Narver, J. C. (1995). Market Orientation and the Learning Organization. Journal of Marketing, 59(3), 63-74.

Song, M., Dyer, B., & Thieme, R. J. (2006). Conflict Management and Innovation Performance: An Integrated Contingency Perspective. Journal of the Academy of Marketing Science, 34(3), 341-356.

Wang, C., & Han, Y. (2011). Linking properties of knowledge with innovation performance : The moderate role of absorptive capacity. Journal of Knowledge Management, 15(5), 802-819.

Wang, Y., & Liu, F. (2020). Proactive or responsive market orientation for stronger service innovation capability: the moderating roles of contractual and relational governance. Journal of Business & Industrial Marketing, 35(5), 863-874.

Wang, Y., Zhang, H., & Song, M. (2020). Pure or ambidextrous strategy? A study of responsive and proactive market orientations in industrial firms. Journal of Business & Industrial Marketing, 35(6), 1001-1010.

Yao, F. K., Jiang, K., Combs, D. R., & Chang, S. (2020). Informal institutions and absorptive capacity: A cross-country meta-analytic study. Journal of International Business Studies, early access.

Yuki, S., & Kubo, T. (2023). The incompatibility of proactive market orientation and postponement strategy in product differentiation. Journal of Business & Industrial Marketing, 38(13), 92-104.

Zhang, J., & Duan, Y. (2010). The impact of different types of market orientation on product innovation performance. Management Decision, 48(6), 849-867.