This study examines the impact of institutional environment on the international performance of small-and medium-sized enterprises (SMEs) and how this relationship is influenced by network competence. Design/methodology/approach: This study uses a quantitative approach. In total, 119 internationally operating Finnish SMEs from five industry sectors are sampled via a crosssectional survey. Data are analysed through regression modelling. Findings: The international performance of SMEs is influenced directly and indirectly by institutional drivers. The results show that network competence mediates the positive relationship between institutional drivers and international performance. Research limitations/implications: Network capability development can help SMEs leverage more or less favourable institutional environments for successful internationalisation. Perceived institutional drivers directly result in higher performance, but the effect can be partially mediated by dynamic capabilities. The limitations of the study include its singlecountry context and the cross-sectional nature of the data. Practical implications: SMEs should take their home countries' institutional environments into account, but for long-term success, they should develop the ability to manage their business networks. A conducive institutional environment may help develop competence, which in turn can enable more successful internationalisation in terms of scale, scope and satisfaction. Social implications: Decision-makers may benefit from knowing that, in addition to capabilities, an institutionally conducive environment that drives domestic SMEs toward international markets may be an antecedent of successful internationalisation in the SME sector. Originality/value: This is one of the few studies to illustrate how network capabilities can mediate the influence of institutional factors on entrepreneurial internationalisation. It combines institutional theory and the dynamic capabilities view to explain successful SME internationalisation.
Academic research is increasingly emphasizing the critical role of business models (BMs) and business model innovation (BMI) in the international entrepreneurship (IE) domain, yet empirical studies on the topic are quite limited. This study demo0nstrates the role of BMI and entrepreneurial orientation (EO) in the internationalization of small-and medium-sized enterprises (SMEs). Specifically, we explored the mediating role of BMI in the relationship between EO and international performance among internationalizing SMEs. Drawing on a cross-industrial sample of 95 international Finnish SMEs, we empirically test the hypothesized relationships by developing a confirmatory factor analysis measurement model with subsequent application of ordinary least squares multiple regression. The results suggest that BMI positively and significantly mediates the relationship between EO and international performance. In addition, EO has a positive and significant effect on SMEs' BMI. Thus, the findings of the study imply that both BMI and EO are important drivers of international performance for internationalizing SMEs. The study contributes to the IE literature by illustrating the dynamics of BMI and providing evidence of the linkages between strategic orientations and BMI in the international performance 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.
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