From entrepreneurial orientation to export performance: A pathway through vicarious learning and absorptive capacity in international SMEs

This research examines how entrepreneurial orientation drives export performance in small and medium-sized enterprises (SMEs), focusing on the mediating role of vicarious learning and the complementary roles of absorptive capacity. Integrating Social Learning Theory and the Knowledge-Based View, the study also draws on attention-based and cognitive perspectives to explain how entrepreneurial orientation directs managerial attention toward externally observed export practices and shapes how these practices are interpreted. Using survey data from 365 SMEs in key export industries in Sri Lanka, a collectivist, high power distance context characterized by dense relational networks and hierarchical authority structures that shape how firms observe, imitate, and learn from others, the analysis employs partial least squares structural equation modeling (PLS-SEM) and conditional process modeling. Results indicate that vicarious learning significantly mediates the relationship between entrepreneurial orientation and export performance, and that potential and realized absorptive capacity operate as complementary capabilities along this pathway. Specifically, potential absorptive capacity strengthens SMEs' ability to acquire and assimilate vicarious export knowledge, while realized absorptive capacity enables the conversion of that knowledge into improved export performance. Multi-group analysis reveals that these effects are stronger in industrial sectors embedded in codified knowledge networks than in agricultural sectors. Overall, the findings highlight the value of combining indirect learning mechanisms with knowledge absorption capabilities to enhance export performance in resource-constrained environments.