Exploring the role of individual level and firm level dynamic capabilities in SMEs’ internationalization

This paper presents a multi-level model that examines the impact of dynamic capabilities on the internationalization of SMEs while taking into account the interactions among them. The purpose of the research is to understand the applicability of dynamic capabilities at the individual and the firm level to the SME internationalization process in developing country context and to assess to what extent a firm’s asset position and individual level dynamic capabilities influence the generation of firm level dynamic capabilities in SMEs. First, the dynamic capabilities theory was theoretically linked to the internationalization phenomenon. The relationships among firm-level dynamic capabilities, individual-level dynamic capabilities (owner specific dynamic capabilities), and internationalization were identified. The research framework and hypotheses were developed and empirically tested with 197 SMEs. The findings established that owner-specific dynamic capabilities have a positive influence on both firm dynamic capabilities and internationalization, and firm dynamic capabilities positively influence internationalization. It was also found that the market assets position measured as perceptual environmental dynamism positively influenced firm dynamic capabilities but structural and reputational asset positions of SMEs did not influence generation of firm dynamic capabilities. Moreover, firm dynamic capabilities had a mediation effect in the relationship between owner-specific dynamic capabilities and internationalization. Theoretically, this confirms the relevance of dynamic capability theory to internationalization and the possibility of integrating existing internationalization theories. Entrepreneurs, SME managers, and policy-makers could gain valuable insights on how entrepreneur and firm capabilities lead to better international prospects from this outcome

SMES' internationalisation: Discovering a model of influential factors from an eastern-developing nation

Western countries have discovered factors influencing small-to-medium enterprises (SME) internationalisation, yet Eastern nations are still struggling for empirical evidence. This article seeks to investigate the influential factors, identify the most influential characteristics driving SMEs to internationalise and develop a model of SME internationalisation within an Eastern-developing nation, Malaysia. A panel of 16 experts, including academicians, policymakers, supporting government agencies, the Chamber of Commerce and research institutes took part in long distance telephone conversations. To ensure the authenticity of the experts’ stances, they were selected based on their positions, qualifications, affiliations, age and length of working experience. The Expert Panel was identified from the internet and through personal contacts. Majority of the experts involve directly with the SME development in Malaysia. The underlying assumption of this Expert Panel is to give relevant opinions and a legitimate understanding of the internationalisation process of Malaysian SME. The findings from a modified Delphi Technique indicate that networking is the most influential factor, followed by firm characteristics, industry factor, external influence and motivational aspects. Therefore, a Malaysian model of the factors influencing SME internationalization is derived. To deal with complexity of networking as a crucial means to internationalization, a networking linkages model is proposed for practicality. In particular, this study provides some insights into SMEs internationalisation process and identifies suggestions for future research

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