Internationalization of Chinese SMEs: The Perception of Disadvantages of Foreignness

Abstract

The paper aims at extending previous research on the specific barriers experienced by emerging markets-based SMEs expanding internationally and the necessary corporate resources and capabilities to support the first stages of their expansion. Framed within resource-based theory (RBV) and liability of foreignness perspectives, the study focuses on four main areas: limited knowledge of external markets, socio-cultural differences, unfamiliarity with foreign contexts and business practices, and limited local business contacts, reliable representatives, and control systems. The data was collected from more than 500 Chinese SMEs and then analysed using multivariate and stepwise regressions. The research results show that external factors, both at the domestic level and in host markets, ranging from local regulations and distribution facilities to cultural differences and exchange rates, are perceived to be critical for the performance of business expansion. The research provides deep insights on the barriers faced by SMEs from emerging economies when doing business abroad and especially to discriminate among its different sources of liabilities. The results also suggest that the RBV approach is insufficient to analyse the barriers associated with liabilities of foreignness, newness and outsidership.

Digital Transformation among SMEs: Does Gender Matter?

“…Firstly, from the review of the existing literature, it is evident that several socio-demographic factors and the adoption of digital technologies can shape the perception of digital transformation (Table 1). Secondly, according to the RBV for sustained performance, an organisation should be equipped with different types of resources and capabilities including physical capital resources (e.g., internationalisation), technological resources (e.g., adoption of digital technology, use of digital marketing tools, research and development efforts toward innovation), human resources (e.g., organisational culture including digital attitude to work and attitudes toward women) [34,64,73,74]. In a study by Gupta et al [75] on agile software development (ASD), where cultural awareness affects the use of social and technical agile practices, e.g., agile values, the authors found that ASD practices should reflect new cultural assumptions where firms need to identify and appropriately manage the cultural transitions involved in the adoption process of ASD practices.…”

Exploring the Interactions of Factory Workers in China: A Model Development Using the Grounded Theory Approach

“…SMEs that operate factories contribute more than 60% of China's total gross domestic product (GDP) and 80% of the country's employment [71], but SME factories often lack sufficient funds to purchase advanced production machines and instead employ qualified skilled workers. Scholars believe that although the size, number of employees, and levels of capital of China's SME manufacturers are not as large as those of large-scale factories, SMEs have the advantage of better management of their factory workers [72,73].…”

Strategies to Grow and Expand a Nonprofit Business

“…Chen, Chang, and Hsu (2017) found that board capital, which is comprised of boards' international experience, directors' industry-specific responses, and directors' board appointments, is positively associated with internationalization, and that board coworking experience has positive moderating influence on the board capitalinternationalization relationship. In another study, the researchers found that external factors as distribution facilities, local regulation, exchange rates, and cultural differences, are perceived to be important for the performance of business expansion, at both domestic and host markets (Fornes & Cardoza, 2019). Biloshapka and Osiyevskyy (2018) highlighted in their study that there are drivers underpinning growth and these are the introduction of new products and services, the increase in sales to existing customers, the acquiring of new customers, and benefitting from the overall market growth.…”