Using the “best‐fit” approach to investigate the effects of politico‐economic and social barriers on SMEs' internationalization in an emerging country context: Implications and future directions

Abstract

The way this study has used the "best-fit" approach has facilitated the investigation of how three hypothesized constructs of political, economic, and social barriers can deepen our knowledge of their impacts on small and medium-sized enterprises (SMEs)' internationalization within a small developing country context. Based on a quantitative analysis of the three hypothesized barriers, we used the "best-fit" approach to measure the extent to which the SMEs' internal variables like people, products, services, and practices might best fit some of the people and non-people factors external to the businesses. The application of the "best-fit" approach onto the three hypotheses-politics (H1), social (H2), economics (H3), helped us in explaining the major social and politico-economic barriers faced by a developing economy' (Bangladeshi) SMEs' internationalization despite previous literatures' emphasis on the impacts of globalization, market drivers or their oversight. Based on the findings, we point to future research trajectory. This study used primary survey data from 212 Bangladeshi SMEs and successfully validated an HR model by using Smart PLS3 software. The results from the hypotheses were used to produce the HR model to help SMEs identify the significance of people and economic factors and propose these aspects for inclusion in the "best-fit" approach, SME, and globalization research. K E Y W O R D Sbest-fit approach, developing country, HR model, internationalization, SMEs

Dynamic capability of the firm: analysis of the impact of internationalisation on SME performance in an emerging economy

“…Although SMEs are significant both for all types of economies, emerging economies are more dependent to these smaller firms. On the other hand, many SMEs struggle to survive in the long run (Mendy, et al,, 2020). While this is a signific a nt issue for entrepreneurship research, the number of studies on the internationalisation of SMEs is very limited.…”

“…Cadogan et al (1999) considered market expansion as an outcome of internationalisa tio n strategy. Although larger firms are at the forefront of international market expansion, SMEs are also coming forward to expand the market internationally (Mendy et al, 2020;Pangarka, 2008) and earning more revenue from international market than local market (Chelliah et al, 2010). Some studies find positive relationships between internationalisation and market expansion such as Dhanaraj & Beamish (2003), Akyol & Akehurst (2003), Morgan et al (2004) and Smolarski & Kut (2011).…”

“…However, financial markets and other institutio na l failures in the home country may prevent the development of SMEs. Internationalisa tio n presents itself as a novel way for SMEs to grow (Mendy et al, 2020) and circumvent financ ia l and institutional barriers (Filatotchev et al, 2009;Ganotakis & Love, 2012;Gashi et al, 2014).…”

Place and policy barriers of rural Nigeria's small and medium enterprises' internationalization

“…In order to validate our model, this study used survey strategy where common method variance (CMV) is an issue typically (Mendy & Rahman, 2019). This concern is even higher for the social and behavioral sciences (Mendy, Rahman, & Bal, 2019). Although this study used structural relationships, the influence of CMV can still have significant impact as mentioned by Kline, Sulsky, and Rever‐Moriyama (2000).…”

“…In addition, non‐response bias in mail surveys is very common. To overcome potential CMV and non‐response biases, this study took a range of measures including pre‐notification and reminders; using cluster sampling technique and t ‐tests on the average of early and late respondents (Mendy et al, 2019). It is also worthy to note that this study conducted a pilot prior to the actual survey.…”