Examining the Moderating Effect of Environmental Dynamism on the Relationship between firm Innovativeness and International Performance of Indonesian SMEs

Abstract

This paper outlines a conceptual framework on how innovativeness can affect international performance. It is intended to portray how small and medium entrepreneurs (SMEs) in Indonesia enhance their innovativeness in order to compete and perform in international market. As SMEs involved in international business activities often experience unfamiliar and unpredictable environments, they are expected to face various challenges concerning governments' rules and regulations, competitive pressures and consumers' demands in foreign markets. Thus, this paper will also focus on the implication of environmental dynamism on Indonesian SMEs innovative efforts and international performance. The proposed framework will highlight the antecedents and consequences of SMEs innovativeness when the dynamism is high in foreign business environment. This study is part of ongoing PhD research on international performance. Theoretical population is related to international performance and the study population associated to Indonesian SMEs' international performance. The study will be utilizing quantitative method to seek reliable responses and data collection would be used by mail survey. The interrelationships between the variables, theoretical and managerial implications of such perspective are further discussed. The findings from the study expected to expose the interrelationship between innovativeness, international performance and environmental dynamism, which specifically intended to help Indonesian SMEs to enhance their performance in international market.