The Role of Business Strategies and Financial Decisions in Preparing for International Market Entry and Improving SMEs’ Performance: An Entrepreneurial Finance Perspective

Abstract

This paper strives to examine the role of international market entry in optimizing the effects of business strategies and financial decisions on SMEs’ performance. In addition, this study analyzes the role of financing access in moderating the effects of business strategies and financial access. The research sample was comprised of 250 SMEs from various industries in the city of Salatiga, Central Java Province, and the city of Medan, North Sumatra Province, Indonesia. A Partial Least Squares (PLS) - Structural Equation Modelling (SEM) was utilized to test the hypotheses. In general, this research demonstrates that: (1) business strategies and financial decisions are the determinants of international market entry, (2) business strategies are a determinant of SMEs’ performance, (3) business strategies and international market entry are factors of SMEs’ performance, and (4) international market entry optimizes the effects of business strategies on SMEs’ performance.

Unlocking the Path to International Expansion: Investigating the Impact of Managerial International Experience on SME Internationalization

“…International Experience International experience refers to the knowledge, skills, and understanding that small and medium-sized enterprises (SMEs) gain through engaging in international business activities (Muharam et al, 2020). It encompasses the exposure to different markets, cultures, regulations, and business practices that SMEs acquire when operating beyond their domestic borders (Li et al, 2018).…”

“…It encompasses the exposure to different markets, cultures, regulations, and business practices that SMEs acquire when operating beyond their domestic borders (Li et al, 2018). International experience is crucial for SMEs as it enables them to develop a global mindset, adapt to diverse environments, and effectively compete in the international marketplace (Muharam et al, 2020).…”

“…Collaboration between SMEs can be a way for them to confront competition and gain exposure to international markets (Sitharam & Hoque, 2016). Additionally, SMEs should focus on developing their internationalization strategies and business performance by considering factors such as product adaptation, knowledge transplantation, and reducing business uncertainty through experience (Muharam et al, 2020).…”