Strategic Learning, Capability and the Performance of Diversification Strategy: Evidence from Chinese Small and Medium Size Enterprise Groups

This study examines the causal links among strategic learning, resource combination capability and the performance of Chinese small and medium size enterprise groups which conduct diversification strategies as the ways to expand and learn. In a sample of 405 parent companies, the study finds that strategic learning plays positive roles in the development of resource combination competence and the shape of performance, while resource combination capability plays a negative role to determine the performance. The structural defect of resource combination capability is discussed and the improvements of internal and external institutional environments are suggested