Application of human resource management's universal model: An examination of people versus institutions as barriers of internationalization for SMEs in a small developing country

Although the importance of people and institutions has been highlighted in multinational enterprise studies, the association between people, institutions, and the internationalization of small to medium‐sized enterprise (SMEs) is an underexplored issue from the context of a small developing country. We examine theories subsumed under the Universal Model of human resource management (HRM) onto SMEs to study the hypothesized people and institutionally orientated barriers posed to SMEs’ internationalization. Using quantitative analysis, the impacts of the barriers on internationalization are highlighted with particular attention to employer attractiveness. Following extant literature review, this study has used primary data collected through questionnaires from 212 Bangladeshi SMEs. We developed and validated the partial least square‐based structural equation model (PLS‐SEM) to assess the impacts and successfully framed people versus institutional barriers as a second‐order hierarchical reflective model, which has not been done previously. Given their marginal significance over institutions, people‐oriented cultural barriers should be included as an extension of the Universal Model to study SME internationalization.     

Business group affiliation and SMEs’ international sales intensity and diversification: A multi-country study

This study examines the impact of business group (BG) affiliation on international sales intensity and diversification in small and medium-sized enterprises (SMEs) by using a multi-country sample of over 13,000 SMEs from 34 European countries. Drawing on the revised Uppsala internationalization model and network theory, this paper suggests that the effects of BG affiliation on international sales intensity and diversification depend on the geographical dispersion of the BG network ties, the size and the age of the firm, and the institutional support in the home country. Thus, we find that interfirm networks in the form of BGs are a double-edged sword that can have both favorable and unfavorable consequences for international sales, depending on the geographical dispersion of the BG’s ties. In addition, the results reveal that BG affiliation is more beneficial for smaller SMEs and SMEs in countries with lower institutional support that are more dependent on the network resources embedded within BG networks.     

The belt and road initiative,cultural friction and ethnicity: Their effects on the export performance of SMEs in China

China’s Belt and Road Initiative (BRI) has provided Chinese firms with significant incentives to speed up the pace of internationalization. Yet very little international business (IB) research has been found to empirically examine such policy effects. This study explores this important issue using Chinese firms of different ethnicities in the Xinjiang Uygur Autonomous Region (XUAR) of China. We propose that the BRI has a positive formal institutional effect on the export performance of XUAR firms that target the “Belt” countries. Both cultural friction and ethnicity serve as the unique cultural contingencies that moderate the relationship between the BRI and export performance. More specifically, the cultural friction that results from the process of internationalization will negatively affect the export performance prompted by the BRI. The Uygur-owned firms will benefit more from the BRI due to their cultural similarity. Overall, the study takes the lead in investigating both internal conditions and external environments that promote and inhibit the internationalization process of small-to-medium enterprises (SMEs) in the XUAR that are geographically close to the “Belt” countries. The findings help enrich the understanding of the dual “push” and “drag” effects on the outcomes of SMEs’ international activities due to the government-led initiatives and the understanding of micro-foundation toward internationalization from an ethnicity perspective.     

Networking and internationalization of SMEs in emerging economies

Networking has been established as an important source of small- to medium-sized enterprises (SMEs) business expansion in many developed economies. Often, it provides the necessary intelligence leading to internationalization. The question this study addresses is “What are the roles and sources of networking of SMEs internationalization in emerging economies?” This study responds to this query through a dyadic study involving expert-opinion survey of SME development professionals and case studies of SMEs internationalization. The convergent views identified three interconnected sources of networking for SMEs internationalization, which are government institutions, business associates, and personal relations. The results affirmed that accomplishment of internationalization requires cohesion among the myriads of networking sources and operating agencies. A systems approach towards supporting the creation and management of networking linkages for internationalization combines systems thinking perspective with institutional view. It emphasizes integration of coordination, facilitation, and monitoring functions. Thus, suggesting institutional support and systems thinking are important constructs in the theory of international entrepreneurship. Policy makers and entrepreneurs of SMEs gain actionable points to ensure effectiveness of institutional support mechanism and to enhance their business internationalization, respectively.     

Internal and external determinants of export performance: Insights from Algeria

The internationalization of small and medium‐sized enterprises (SMEs) has been the focus of numerous studies. However, while the attention has thus far been on SMEs operating in developed countries, firms evolving in a developing context, including Africa, have been largely neglected. To address this, and drawing on a dual resources‐based and network‐based view, this study simultaneously investigates the importance of internal and external resources for firms’ export performance and regularity in the context of North African SMEs. Using a sample of Algerian exporters, the study reveals the superiority of discrete resources for boosting export performance and export regularity. These findings provide directions to Algerian SME managers and policymakers as to important factors driving the internationalization process in the developing Algerian context.     

Institutional pressures and international market orientation in SMEs: Insights from the French wine industry

In this research, we examine how external institutional pressures influence international market orientation (IMO) in small-medium sized enterprises (SMEs). We use institutional theory and insights from the international entrepreneurship literature to predict how different formal regulative pressures (from national and international sources) as well as different informal normative pressures (from distributors and end-consumers) influence IMO in SMEs. We test our hypotheses using survey data from 107 small wineries across all of the main wine-producing regions in France. The results provide support to the central assertion that it is outside pressures on decision-making – rather than an endowment of internal resources and capabilities – that influence IMO in SMEs. External regulative sources have the strongest effects with pressures on decision-making from national laws having a negative impact on IMO and those from international laws having a positive impact on IMO. We find partial support for the effect of normative pressures from distributors and end-consumers. Implications for theory and management of internationalization in small firms are discussed.     

Exploring the Role of a Country's Institutional Environment in Internationalization: Strategic Responses of SMEs in Russia

Based on the suggested five-pillar institutional framework, the study empirically investigates the impact of the institutional environment on internationalization aspirations of small and medium enterprises (SMEs) in emerging economies and maps their strategic responses against imposed institutional pressures. The data collected across five forest cluster SMEs in Saint Petersburg and Moscow are analyzed. Political instability, corruption, bounded cognition, over-patriotism, and high power distance act as the main constraints, while demands for new knowledge and funding are identified as the main drivers for internationalization. The classified institutional challenges are mapped against the possible strategic responses of the SMEs, such as acquiescence, compromise, avoidance, defiance, and manipulation.     

Networking responses to different levels of institutional void: A comparison of internationalizing SMEs in Egypt and the UK

This paper reports a comparative qualitative study of how decision-makers in internationalizing SMEs respond to relevant institutions in their domestic environment through networking activity. Twenty SMEs are compared respectively from a developing economy (Egypt) and a developed economy (UK). The two countries contrast both in the effectiveness of their institutional support for SMEs and in their cultural norms towards network relationships. Substantial differences are found between the two national samples in SME decision makers’ networking behaviour in response to specific institutional conditions. The links between institutional conditions, national cultural norms and SME networking responses are explicated in a new theoretical model.     

Rapid internationalization of traditional SMEs: Between gradualist models and born globals

Within the last 20 years, a number of traditional small-medium enterprises (SMEs) have accelerated their international commitment by investing in distant countries despite limited market knowledge, limited use of networks, and limited international experience of the entrepreneurs. The purpose of this paper is to draw research attention to this phenomenon and to compliment the existing literature on internationalization process of SMEs.We argue that traditional SMEs are able to speed up their internationalization process by, thus, rapidly catching up with the increasing global competition. The peculiar path followed by SMEs is described by analyzing five case firms and explained by contrasting to the leading literature. The empirical evidence suggests that specific strategic focus (as opposed to knowledge-intensity, international network, and international experience) is the determinant success aspect of the change in the internationalization process.     

浙商与台商跨区商业网络构建比较研究:一个文献综述

浙商与台商,同受闽南海商文化影响,基于不同的制度背景,构建出各异的跨区商业网络。比较这二者的发展模式,既体现研究新意,又突显典型模式价值。本文梳理中小企业网络与国际化成长、基于社会资本理论的中小企业国际化、海外华商网络、浙商与台商跨区商业网络构建等几个方面的相关文献,提供浙商与台商跨区商业网络比较研究的理论基础,并提出未来研究的方向。     

Latin American franchise internationalization: The impact of institutional environment

We analyze the internationalization of Brazilian franchise chains in Latin America. A total of 119 observations verify international commitment in each country in relation to institutional environment factors and how they are moderated by chain size and industry. The results show that despite all institutional aspects having a significant effect, their explanatory power depends on chain size. Larger franchise chains usually choose countries with better institutional aspects in terms of contract compliance and business freedom, even if the efficiency of business conditions in these countries are not the best in Latin America. In this study, were used public data from international organizations that report on the ease of doing business, level of corruption, political risk, and legal regulations. Specifically, it contributes by using institutional theory in franchising in order to understand the process of chain internationalization originating from emerging markets. Our results, in part, contradict the idea that the origin disadvantage is always an advantage of internationalization.     

Exploring SME cybersecurity practices in developing countries

The continued use of information technology systems by small and medium enterprises (SMEs) in developing countries has the potential to bring significant benefits but, at the same time, expose them to online cybersecurity threats. Addressing these threats is, therefore, of paramount importance for developing countries, not only because SMEs are seen as the vehicle for employment and job creation, but because research on SMEs and cybersecurity in this context is limited. This study is a contribution toward addressing this gap.

The purpose of this study is, therefore, to explore SME cybersecurity practices and the challenges they face in developing countries. The goal is to sensitize practitioners and government institutions about the challenges and practices faced by SMEs, so that the various parties can work collaboratively in providing context-specific solutions to address these challenges and improve current cybersecurity practices. The study follows a qualitative enquiry approach to solicit information from three South African SMEs that had implemented cybersecurity practices. The findings show that an SME’s perception of cybersecurity is constrained by internal factors of budget, management support, and attitudes. Further findings show that SMEs’ cybersecurity practices are affected by the landscape of cybersecurity, as well as institutional pressures.     

Developing Absorptive Capacity through e‐Business: The Case of International SMEs

This research uses the absorptive capacity concept as a theoretical lens to study the effect of e‐business upon the internationalization performance of small and medium‐sized enterprises (SMEs), addressing the following research issue: To what extent are manufacturing SMEs successful in developing their potential and realized absorptive capacity in response to the environmental uncertainty brought about by their internationalization? Results of a survey study of 588 manufacturing SMEs indicate that e‐business capabilities have a significant impact on internationalization performance to the extent that these capabilities are developed as a response to increased environmental uncertainty. Moreover, these capabilities are realized through the development of networking, advanced manufacturing, and marketing capabilities that also respond to environmental uncertainty.     

The effect of network competence and environmental hostility on the internationalization of SMEs

Research findings suggest that networks offer small and medium-sized enterprises (SMEs) opportunities to internationalize successfully. However, the role of internal organizational competence in the process of developing and maintaining such networks in hostile external environments has received little attention. The aim of this study is to shed light on the relationship by examining the positive influence that the network competence of SMEs has on their propensity to internationalize, and on their subsequent international performance. Given that the willingness of firms to enter and perform well in markets appears to also depend on environmental hostilities, this external influence on SME internationalization is incorporated into the study. We also examine whether the level of environmental hostility moderates the relationship between network competence and SME internationalization. The empirical part of the study comprises a web survey of 298 Finnish SMEs representing five different industry sectors: metal, food, furniture, software, and knowledge-intensive business services. Confirmatory factor analysis and regression models are used in the analysis. The results indicate that higher levels of network competence are positively related to the propensity of SMEs to internationalize, as well as to their international performance. Conversely, the level of environmental hostility has a negative effect on the performance measure, but not on the internationalization propensity. Additionally, the influence of network competence is not moderated by environmental hostility. The results indicate that internal network competence and external environmental hostility play a role in SME internationalization, and that the positive influence of network competence exists independently of the hostility in the environment.     

External Financing,Export Intensity and Inter‐Organizational Collaborations: Evidence from Canadian SMEs*

Drawing on institutional theory, resource‐based perspective and internationalization theory, we propose that the domestic collaborations of small and medium‐sized enterprises (SMEs) have a direct positive effect on their export intensity, as well as an indirect effect through enhancing these firms' access to external financing. We test our hypotheses on a sample of 151 Canadian manufacturing SMEs and find partial support for the indirect relationship. Overall, our results suggest that domestic collaborations positively affect SMEs' access to equity financing but not to bank financing. While both equity and bank financing are found to enhance these firms' export intensity, bank financing seems to have a greater impact. The implications of these results are discussed.     

Exploration of Chinese SMEs' export development: The role of managerial determinants based on an adapted innovation‐related internationalization model

Over the past two decades, small to medium‐sized enterprises (SMEs) in China have achieved rapid international development. Due to China's unique cultural and institutional environments, our understanding of the influence of managerial determinants on internationalization is still limited. This exploratory study takes the lens of the innovation model of internationalization to revisit the dynamic development of Chinese SMEs' export operations. Based on the four in‐depth case studies, the findings suggest that exports by Chinese SMEs are influenced by managerial perceptions such as negative country‐of‐origin effect and strict overseas quality standards. In addition, they show that both external and internal drivers act as “change agents” in their internationalization involvement. These findings will assist various stakeholders—government and export promotion agencies—to develop and deliver needs‐based supports and encourage nonexporters to participate in international operations.     

Institutional unpredictability and foreign exit−reentry dynamics: The moderating role of foreign ownership

We extend the internationalization process literature by theorizing how institutional unpredictability and its changes can affect the foreign exit?reentry process and how the multidimensionality of foreign ownership can alter these impacts as a firm's conduit to different foreign countries. Drawing on the dynamic institution-based view, we examine a process whereby firms exit and reenter foreign countries in response to institutional dynamism. By distinguishing foreign shareholders from host and nonhost foreign countries, we identify the negative moderation effects of host-country foreign ownership but not nonhost foreign ownership. Our study, therefore, contributes an integrative framework to the de- and re- internationalization research.     

Competing on the edge: Implications of network position for internationalizing small- and medium-sized enterprises

Three generic competitive strategies attributed to internationalizing SMEs of targeting niches, differentiating products and leveraging networks fail to adequately explain how SMEs win customers in other countries against both large and small competitors. This study distinguishes competitive strategy (how firms compete) from competitive advantage, and from competitive engagements where firms deploy their competitive advantages to win customers within business network relationships. By abductively reasoning from the competitive engagements entered into by the internationalizing SMEs from the Fleet Management Systems industry segment in New Zealand, we show that these firms often compete with foreign rivals by using their position on the edge of a business network to leverage information asymmetries across structural holes. We contribute by integrating this conception of internationalizing SME competitive strategy with the business network foundations of the Uppsala internationalization process model.     

Entrepreneurial orientation, management commitment, and human capital: The internationalization of SMEs in India

Small- and medium-sized enterprises (SMEs) make sizeable contributions to the economic success of nations. Research concerning the internationalization of SMEs is available in the context of developed economies but less is can be found dealing specifically with the entrepreneurial behavior and international expansion of SMEs in emerging markets such as India. This research extends the literature addressing the relationships surrounding the internationalization of SMEs in India as related to entrepreneurial behavior, firm resources, and commitment to internationalization. Entrepreneurial orientation, a commitment to internationalization, and the ability to leverage human capital influence the international success of Indian SMEs, based on the analysis of data collected from 150 Indian SMEs.     

Strategic decision-making processes,international environmental munificence and the accelerated internationalization of SMEs

Motivated by the paucity of studies examining the effects of strategic decision-making processes on accelerated internationalization, this study draws on the organizational information processing theory and the resource-based view of the firm to argue that procedural rationality and politicization have a negative effect on accelerated internationalization of SMEs. Using a sample of 176 internationalized Greek SMEs, the study finds that the procedural rationality and politicization of SMEs reduce the probability of accelerated internationalization. These relationships are more pronounced in munificent international environments, indicating that when accelerated internationalization is constrained by strategic decision-making processes, SMEs may miss opportunities in attractive international markets. The study contributes to the organizational information processing theory, to the literature on the speed of decisionmaking in SMEs, and to the literature on accelerated SME internationalization.