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Yes it does, there are actually 4 match types you can also utilize on Adwords Exact match, Phrase match, Broad match and Negative match.
Broad Match - This is the default option. If your ad group contained the keyword tennis shoes, your ad would be eligible to appear when a user's search query contained tennis and shoes,
Phrase Match - If you enter your keyword in quotation marks, as in "tennis shoes," your ad would be eligible to appear when a user searches on the phrase tennis shoes I.E. red tennis shoes
Exact Match - If you surround your keywords in brackets -- such as [tennis shoes] your ad would be eligible to appear when a user searches for the specific phrase tennis shoes.
Negative Keyword - If your keyword is tennis shoes and you add the negative keyword -red, your ad will not appear when a user searches on red tennis shoes.
Negative Keyword - If your keyword is tennis shoes and you add the negative keyword -red, your ad will not appear when a user searches on red tennis shoes.