Dismantling institutional complexity behind international competitiveness of emerging market firms

The paper examines the perceived role of emerging market institutions in the creation of firm‐specific advantages of local small‐ and medium‐sized enterprises (SMEs) supporting international expansion and competitiveness. Our objective is to deepen conceptual understanding of the complex link between emerging market institutional factors and an ability of emerging market SMEs to compete internationally. Our empirical evidence from Russian software SMEs operating in global niche markets reveals that managers perceive institutional influence on their firms' ability to compete internationally in a number of direct and indirect means. We find that, in addition to the well acknowledged negative impact of institutions, there are supportive and triggering forces that incentivize SMEs' international expansion and development of competitive advantages. We contribute to the literature by elaborating about the complexity of institutional influence on international competitiveness of emerging market SMEs. This research offers insights for managers about the prospects of international expansion of SMEs from emerging markets.     

The internationalization process in the small and medium sized firms: A case study on the Italian clothing industry

In this research we use a data-base that reveals the propensity for contractual ventures and direct investments (1051 operations) of the clothing Italian companies during the period 1987–1991, on a national (342 operations) and international level (709 operations). The latter were analyzed with reference to the internal (412) and external growth strategies (297), cooperative (362) and non-cooperative (347) deals. Our analysis focuses on the different strategies that SMEs, on one hand, and large companies, on the other hand, show in the internationalization process. Main results of the study are:

the international growth of the SMEs takes place mainly through contractual agreements (68%), more so than with non-cooperative operation (32%), whereas in large companies the non-cooperative strategies slightly prevail (54%). Consequently, the external growth strategy is very important for the SMEs (72%) and somewhat less important for the large companies (54%);

the cooperative growth is usually seen by SMEs as an expansion both of the commercial (48% of the operations involves commercial purposes) and of the production areas (48% of the cases). This could indicate that SMEs try to organize on an international level the same network model used in Italy: SMEs decentralize their production within the country through networks of companies and industrial districts, whose horizontal connections (among SMEs themselves) and vertical connections (with large companies) provide flexibility and low costs;

large companies' expectations of the Single European Market have brought a great number of international operations in Europe (24%), notwithstanding the notable importance of Japan (23%) and U.S. (17%); on the contrary, SMEs focus on “niche and rich markets” as Japan (40%); but as far as the contractual agreements are concerned, both types of firm privilege the Japanese market: almost 50% of SMEs' international agreements are directed towards Japan (33% in the large company's case);

large companies and SMEs in the middle and high segments of the market carry out more operations than companies operating in the low quality and casual segments;

generally speaking, in Italy there is an urgent need for industrial policies promoting SMEs access to cooperative instruments (“learning by cooperating”).

     

Partnering strategies and performance of SMEs' international joint ventures

The international joint venture (IJV) is an important mode in the internationalization of small- and medium-sized enterprises (SMEs). Internationalization in turn is an entrepreneurial behavior in the pursuit of growth. Partnering strategies in the formation of IJVs can have significant effects on the outcome of SMEs' international expansion. In this study, we examine the performance implications of two types of resources contributed by SMEs' IJV partners, host country knowledge and size-based resources. We develop and test three sets of hypotheses about the longevity and financial performance of a sample of 1117 international joint ventures established in 43 countries by 614 Japanese SMEs that have fewer than 500 employees. Our findings indicate that SMEs' IJVs with local partner(s) may be associated with decreases in longevity, especially when SMEs acquire host country knowledge. The host country experience of Japanese partner(s) does not have any direct effects on IJV profitability but reduces the longevity of IJVs. Finally, the size of Japanese partner(s) increases the longevity of IJVs but may have negative effects on IJV profitability when large Japanese partners have low equity ownership in IJVs. Our findings highlight the differential effects that IJV partners' experience-based and size-based resources have on IJV performance. Our findings also demonstrate that the same strategy could have different effects on different dimensions of performance.     

Motives,choice of entry mode,and challenges of bank internationalization: Evidence from China

This study examines the motives, entry mode choice, and challenges of the international expansion in an emerging country context. Data were collected via interviews from 30 senior managers based on a sample of 10 Chinese commercial banks (CCBs) involved in international expansion over the period of 2001–2013. This study finds greenfield and mergers and acquisitions are the most popular foreign entry mode used by CCBs. The motives of emerging market banks’ internationalization appear to be intrinsically linked to market development to serve customers operating in overseas market, government policies, and strategic knowledge sourcing. In terms of challenges, the study finds lack of management resources/technical capacity, culture, adapting to the host country regulatory environment, and lack of experience to be the main challenges to bank internationalization.     

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.     

Large format stores and the introduction of new regulatory controls in South Korea

Since 1996, when Korea's retail industry was liberalized, new store formats such as large discount stores, have grown, it was widely believed, at the expense of incumbent rivals such as traditional markets and small operators. This paper seeks to empirically test this proposition: an important underpinning to new regulatory control policies. Research involved a spatial analysis of traditional markets (1456), large discount stores (408), and super-supermarkets (SSMs or hypermarkets (729)) spread throughout the country, in order to examine the scale and scope of the influence of the new retail store formats. The research is supportive of the ‘Traditional Commercial Activity Protection Zones’, which protect small and medium-sized enterprises (SMEs). From the perspective of traditional markets, it may be necessary for the South Korean government to promote additional, more proactive, support policies for SMEs.     

论中小企业集群成长中的政府作用

作为重要的参与者,政府在中小企业集群成长中的作用是不能忽视的。在中小企业集群成长中,政府的指导与调控可以避免出现过度竞争、提供中小企业集群发展必需的公共产品以及促进中小企业集群各个主体之间的协调与合作。当然,政府在进行指导与调控时,须注意以现有的或者是新兴的集群为前提制定相应规划,及相应的政策。中小企业集群成长过程中,政府作用的发挥包括宏观、中观环境两个维度,任何一个维度的缺失或者不正常都将影响集群的正常成长与发展。     

SME Export Performance in Indonesia After the Crisis

Firms in export-oriented sectors with more exporters and more foreign investment, or firms with more access/use of credit, tend to export a higher share of their output, whether they are small or large. The latter points out that the benefits of size-neutral policies that improve the overall business and foreign investment climate and secure access to formal credit for all enterprises produce benefits for the entire economy. Small firms with higher use of machinery and higher use of domestic inputs displayed a higher likelihood to increase the share of their output exported. SMEs show rising productivity with access and use of appropriate production inputs. Decades of protective size-specific policies, such as the reservation scheme for SMEs still in place in Indonesia’s manufacturing may have distorted, more than supported, adoption of appropriate technologies among SMEs. These policies may need to be revisited and refocused on more size-neutral policies such as improved access to collateral or reduced cost of business registration and licensing.     

IT-Software SMEs in China,Technology Transfer from Universities and Entrepreneurship,a Successful Nexus？

Drawing on the empirical work of a broader study, this paper examines whether technology is being successfully transferred from universities to the IT-sottware SMEs present in China, and the effectiveness of entrepreneurship in effecting such transfers. A conceptual framework was generated to guide the investigation. Data were elicited using a detailed questionnaire which generated 53 usable responses; follow-up interviews with 17 of the 53 respondents; and four interviews with relevant government officials （civil servants from the Ministry of Science and Technology and state-owned banks）. There were three main fmdings. Chinese software SMEs tend to be reluctant to adopt new technologies from local tmiversities; there is a lack of common purpose between the parties; and entrepreneurs who did undertake such technology transfer felt the process was badly impeded by the lack of available finance, and expressed fears about poor protection of intellectual property rights in China. The majority of the sample firms acted opportunistically, taking advantage of the benefits offered under government schemes to earn rapid returns mainly using extant technologies. These conclusions suggest that the Chinese government＇s policies in this area of technology transfer have had only limited success.     

Electronic Commerce and the Future for SMEs in a Global Market-Place: Networking and Public Policies

This paper explores three inter-related issues: globalisation; the role of small and medium sized enterprises (SMEs); and electronic commerce (e-commerce). A central question is whether e-commerce offers advantages to SMEs that may facilitate their access to global markets and help them overcome the disadvantages they face vis-à-vis large transnational corporations (TNCs)? The paper starts by briefly considering the extent of globalisation and its relationship to free trade. We then go on to consider recent developments in e-commerce, focusing on the key issue of e-payment systems. Differences in the requirements of large and smaller firms are identified, and we identify a number of key issues concerning access of smaller firms to e-payment systems and the (virtual) market place, and outline their implications for regulatory policy. Our analysis highlights the importance of network externalities, and institutional factors affecting trust and the relationships amongst different economic actors. This leads to a consideration of networking and public policies more broadly. One of the central conclusions of our analysis is that there are important synergies between e-commerce (virtual) networks and (real) production networks. This suggests that policy makers and smaller firms should think in terms of extending existing, and catalysing new, real production networks to incorporate e-payment systems for networks of firms in order to facilitate their access to virtual markets.

     

Democratizing Entrepreneurship? Digital Technologies and the Internationalization of Female‐Led SMEs

This study examines how digital technologies affect the international expansion of female‐led small and medium‐sized enterprises (SMEs). Digital technologies have the potential to democratize entrepreneurship by providing access to international market knowledge and facilitating interactions with customers and partners. Building on the original Penrosean specification of the resource‐based view and the notion of versatility of resources, we propose that digital technologies impact positively SME internationalization through the mediation of international market intelligence. Furthermore, we posit that female entrepreneurs will leverage the enabling effects of digital technologies more than their male counterparts. The hypotheses are tested on a representative sample of 300 Bulgarian SMEs. Implications for policy and research are advanced.     

Promoting Small and Medium Enterprises with a Clustering Approach: A Policy Experience from Indonesia

Small and medium enterprises (SMEs) in Indonesia are very important for employment creation and are important sources of economic growth and foreign currencies. It is therefore not a surprise that SMEs receive ample attention in Indonesia. In recent years, particular attention has been paid to development of SME clusters. The main aim of this paper is to review government policies on SMEs with a clustering approach, in Indonesia. The paper argues that in many cases, the development policy has not been so successful. In essence, most failures can be attributed to the fact that one or more critical factors for successful SME cluster development were either not existing or not addressed correctly. Neglecting cluster linkage to markets is one main reason for the failure. Prerequisite for successful cluster development is the cluster's potential to access growing markets, either domestic or abroad.     

Entrepreneurial growth: The role of international knowledge acquisition as moderated by firm age

In line with repeated recent calls for research on specific forms of growth rather than on an undifferentiated notion of “total growth,” our study contributes to the understanding of entrepreneurial growth. By this we mean growth through expansion into new geographic markets and/or via the introduction of new products or services. Building on Penrose's theory of the growth of the firm and on the research streams she has in part inspired, we investigate the impact of knowledge acquisition from international markets on entrepreneurial growth both at home and abroad. We further suggest that the effects of international knowledge acquisition on entrepreneurial growth will vary with firm age. Utilizing longitudinal data on 138 small and medium-sized enterprises (SMEs), we find that the acquisition of knowledge from international markets fuels growth through market development, and that this effect is stronger for international expansion than domestic expansion. Our results also show that firm age negatively moderates the relationship between international knowledge acquisition and entrepreneurial growth via the introduction of new products or services. Specifically, international knowledge acquisition has a positive effect on growth via new products/services development in young firms, but a negative effect in mature firms. We assume this reflects changes over time in how international knowledge is managed.     

What and how do SMEs gain by going international? A longitudinal investigation of financial and intellectual resource growth

This study examines the accumulation of financial and intellectual resources of U.S.-based biopharmaceutical SMEs. We find that internationalized SMEs experience better financial resource growth than domestic market-focused SMEs only in the long run. While international expansion per se does not enable SMEs to accumulate more intellectual resources than via domestic expansion, it exerts a positive impact over time for SMEs with strong alliance capabilities. Moreover, we show that alliance capabilities are more important than in-house technological capabilities for key resource accumulation of internationalized SMEs over time. Our results infer that SMEs gain the benefits of resource exploration via international expansion.     

浅议我国中小企业经济环境及其改善

经济环境因素在中小企业的发展中起着不可低估的作用,当前我国经济政策环境的变化不利于中小企业发展,不规范的竞争秩序也使中小企业处境艰难。要改变这种现状,需要国家管理者从实际出发,结合中小企业的特点和实际困难,制定促进中小企业发展的经济政策,为其创造公平竞争的宏观经济环境。     

Women's Perceived Empowerment in Entrepreneurial Efforts: The Role of Bricolage and Psychological Capital

Women's entrepreneurial empowerment—perceived competence, self‐determination, and ability in managing a firm as an entrepreneur—is important to women's entrepreneurship in developing countries. Drawing on a sample of 369 women entrepreneurs from small and medium enterprises (SMEs) located in Gujarat, a western state in India, we find that women's entrepreneurial empowerment is positively associated with firm revenues. Gains from empowerment could be further enhanced for women entrepreneurs managing resource constraints—through bricolage—and meeting the challenges of self‐employment—through psychological capital. The present study contributes to literature on women's entrepreneurial empowerment and SME performance. Women's empowerment and the bolstering effects of bricolage and psychological capital could help government agencies and non‐government organizations devise programs and policies to improve the performance of women‐owned SMEs in developing countries.     

Assets of origin? Chinese multinational enterprises amidst the Belt and Road Initiative

This article reviews the current literature on the implications of the Belt and Road (B&R) Initiative for Chinese multinational enterprises (CMNEs) and calls for further empirical investigations of the motivations, processes, and consequences of the expansion of CMNEs into B&R countries. We posit that the rapid expansion of CMNEs in these countries indicates assets, rather than liabilities, for the county of origin. Empirical studies in this special issue provide new insights into what is “Chinese” about Chinese foreign direct investment in B&R countries and how the “assets of origin” may play a role in CMNEs' expansion in B&R countries.     

Realising the Marketing Advantages of International Standard-Setting Activities: Opportunities for Innovative Technology-Based SMEs

Despite a growing literature exploring the impact of international standards on the long-term competitive position of large technology-based multinational enterprises and, as a corollary, how these firms participate in standard-setting, comparatively little attention has been given to these phenomena with regard to the internationalisation of small and medium-sized enterprises (SMEs). This is perhaps a reflection of a 'master storyline' that assumes international standard-setting activities are almost solely the purview of larger organisations. Accordingly, this paper explores how small and medium technology-based enterprises participate in international standard-setting processes and the strategic marketing advantages that may accrue through such participation, using a qualitative case-study approach involving six technology-based SMEs in Australia. Summary frameworks depicting different means of participation and marketing related benefits are presented. The findings suggest that innovative technology-based SMEs may use the international standard-setting environment and processes more strategically than often supposed.     

International orientation of Chinese internet SMEs: Direct and indirect effects of foreign and indigenous social networking site use

We examine how international orientation (IO) of small and medium sized enterprises (SMEs) in China is influenced by foreign and indigenous Social Networking Site (SNS) use. Existing international business theory does not explain how SNS use by emerging market SMEs underpins IO. Combining knowledge-based theory, International Entrepreneurship literature and insights from Information Management, we test a model of opposite effects for the use of foreign and indigenous SNS. Analysis of data from 117 Chinese SMEs provides strong support to the central argument that indigenous rather than foreign SNS helps this new breed of firm to become more internationally-oriented.