Examining the complementary roles of market-driven and market-driving orientations in the geographical diversification strategies of e-commerce SMEs

• E-commerce opens new opportunities for resource-constrained SMEs to expand to geographically dispersed markets. • Market-driving orientation is an essential capability that helps e-commerce SMEs to succeed with geographical diversification strategy. • Market-driven orientation, though having no direct effect on the outcome of geographical diversification strategy, is still needed to enable market-driving behaviors. This study examines how e-commerce SMEs can succeed with geographical diversification strategies. We argue that market orientation is crucial in this process. By combining the PLS-SEM with a necessary condition analysis, we explore the independent roles that market-driven and market-driving orientations play in deriving benefits from geographical diversity. We find that only market-driving e-commerce companies can leverage geographical diversification strategies for improved international performance. We also find that a market-driven orientation is a necessary condition for the effective deployment of market-driving behaviors across multiple markets. This study shows that explorations of the complementary relationship between the two market-oriented capabilities in the pursuit of geographical diversification strategies can provide a detailed theoretical account of how international e-commerce can be advanced. In practice, e-commerce SMEs need to be mindful of market conditions as they combine firm-specific assets with digital resources in attempts to achieve desired outcomes.