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This chapter contributes to the ongoing debate about how digitalisation affects the internationalisation of small- and medium-sized firms (SMEs). By applying the Uppsala Internationalisation Process model, this chapter examines the impact of e-commerce on the internationalisation of SMEs. The study uses a unique dataset, which includes 14,513 SMEs across several sectors in 34 countries. The results show that firms using the Internet as a means to provide information about the firm exhibit a higher degree of internationalisation, while using the Internet to facilitate transactions was found to have a positive impact on the ratio of foreign sales to the total sales; however, these foreign sales are likely to be concentrated in less regions/markets. Furthermore, perceived export barriers were found to be a significant moderator of the effects of e-commerce usage on international intensity and international diversification. This suggests that e-commerce does not automatically facilitate the internationalisation of SMEs.

Information and communications technology (ICT) offers enormous opportunities for individuals, businesses and society. The application of ICT is equally important to economic and non-economic activities. Researchers have increasingly focused on the adoption and use of ICT by small and medium enterprises (SMEs) as the economic development of a country is largely dependent on them. Following the success of ICT utilisation in SMEs in developed countries, many developing countries are looking to utilise the potential of the technology to develop SMEs. Past studies have shown that the contribution of ICT to the performance of SMEs is not clear and certain. Thus, it is crucial to determine the effectiveness of ICT in generating firm performance since this has implications for SMEs’ expenditure on the technology. This research examines the diffusion of ICT among SMEs with respect to the typical stages from innovation adoption to post-adoption, by analysing the actual usage of ICT and value creation. The mediating effects of integration and utilisation on SME performance are also studied. Grounded in the innovation diffusion literature, institutional theory and resource-based theory, this study has developed a comprehensive integrated research model focused on the research objectives. Following a positivist research paradigm, this study employs a mixed-method research approach. A preliminary conceptual framework is developed through an extensive literature review and is refined by results from an in-depth field study. During the field study, a total of 11 SME owners or decision-makers were interviewed. The recorded interviews were transcribed and analysed using NVivo 10 to refine the model to develop the research hypotheses. The final research model is composed of 30 first-order and five higher-order constructs which involve both reflective and formative measures. Partial least squares-based structural equation modelling (PLS-SEM) is employed to test the theoretical model with a cross-sectional data set of 282 SMEs in Bangladesh. Survey data were collected using a structured questionnaire issued to SMEs selected by applying a stratified random sampling technique. The structural equation modelling utilises a two-step procedure of data analysis. Prior to estimating the structural model, the measurement model is examined for construct validity of the study variables (i.e. convergent and discriminant validity).

The estimates show cognitive evaluation as an important antecedent for expectation which is shaped primarily by the entrepreneurs’ beliefs (perception) and also influenced by the owners’ innovativeness and culture. Culture further influences expectation. The study finds that facilitating condition, environmental pressure and country readiness are important antecedents of expectation and ICT use. The results also reveal that integration and the degree of ICT utilisation significantly affect SMEs’ performance. Surprisingly, the findings do not reveal any significant impact of ICT usage on performance which apparently suggests the possibility of the ICT productivity paradox. However, the analysis finally proves the non-existence of the paradox by demonstrating the mediating role of ICT integration and degree of utilisation explain the influence of information technology (IT) usage on firm performance which is consistent with the resource-based theory. The results suggest that the use of ICT can enhance SMEs’ performance if the technology is integrated and properly utilised. SME owners or managers, interested stakeholders and policy makers may follow the study’s outcomes and focus on ICT integration and degree of utilisation with a view to attaining superior organisational performance.

This study urges concerned business enterprises and government to look at the environmental and cultural factors with a view to achieving ICT usage success in terms of enhanced firm performance. In particular, improving organisational practices and procedures by eliminating the traditional power distance inside organisations and implementing necessary rules and regulations are important actions for managing environmental and cultural uncertainties. The application of a Bengali user interface may help to ensure the productivity of ICT use by SMEs in Bangladesh. Establishing a favourable national technology infrastructure and legal environment may contribute positively to improving the overall situation. This study also suggests some changes and modifications in the country’s existing policies and strategies. The government and policy makers should undertake mass promotional programs to disseminate information about the various uses of computers and their contribution in developing better organisational performance. Organising specialised training programs for SME capacity building may succeed in attaining the motivation for SMEs to use ICT. Ensuring easy access to the technology by providing loans, grants and subsidies is important. Various stakeholders, partners and related organisations should come forward to support government policies and priorities in order to ensure the productive use of ICT among SMEs which finally will help to foster Bangladesh’s economic development.

The literature documents a shortage in the supply of external funding to small- and medium-sized enterprises (SMEs) in general and to innovative SMEs in particular. This study separates cognitive from financial constraints on innovative SMEs’ growth opportunities. Using data gathered through in-depth interviews with the CEOs of 115 SMEs, we reveal that over and above a problem with supply, there exists a twofold problem on the demand side. Specifically, we document that there is a tendency for these companies to avoid approaching external funding sources, especially ones that gear their investments toward innovation. Our results reveal a cognitive bias (over-pessimism) affecting the entrepreneurs’ (lack of) demand for external financing over and above other firm-specific factors. CEO tenure — our proxy for human and social capital — is significantly lower (higher) in firms that did (did not) pursue external funding. This finding may provide some support for our hypothesis regarding the cognitive bias and over-pessimism of the more veteran CEOs who have had negative experiences regarding recruiting external resources. The impact of this entrepreneurial cognition is shown to be economically detrimental to the enterprise. Nevertheless, the negative effects are not limited to the micro level, but have implications at the macro level as well, due to under-realization of the potential for employment, productivity, and growth of the firms comprising the vast majority of the economy.

The export entry behaviour of small and medium-sized enterprises (SMEs) is a complex behaviour that requires specific tools for a holistic investigation. Thus far, there are inconclusive findings in the literature on key predictors of export behaviour, which may be explained by methodological limitations. In this chapter, using a novel fuzzy-set qualitative comparative analysis for its ability to capture complex causality, the authors study the impact of managerial attributes and collaborative behaviours on SMEs’ export propensity. The analysis is based on a sample of 80 SMEs operating in the emerging country context of Turkey. Participants were selected using a non-probability sampling approach. For export propensity, it is found that no single driver is sufficient to facilitate SMEs’ export entry. Rather, a combination of managerial attributes including export knowledge, international orientation, entrepreneurial orientation and export perception is more likely to lead to export entry. Alternatively, the lack of some of these attributes could be offset by the presence of collaborative activities. Specifically, the shortage of export knowledge, international orientation and entrepreneurial orientation at any rate could be mitigated by collaborative activities. These findings hold important implications for SMEs and export promotion organisations in similar emerging contexts.

Purpose – The main purpose of this paper is to analyze the major problem faced by exporting subcontractors from emerging markets on how to leap over the barrier of low technology and high dependency. The second purpose is to develop a theoretical framework for this analysis.

Methodology – The paper builds on a holistic multiple case study of eight internationalizing small- and medium-sized enterprises (SMEs) in the Baltic Sea Region (BSR). Interviews were performed with managers of four West European SMEs and four East European SMEs all crossing the Baltic Sea. In addition, interviews were performed with each firm's intermediaries/customers on foreign soil.

Findings – The study identifies two main international business marketing strategies for small subcontractors in emerging country markets enabling such firms to escape the trap of low-cost production and high dependency. The first is a traditional subcontractor strategy of integrating more into the contractors' production process. The second strategy is labeled the marketing route. Here, the subcontractor becomes more independent by moving further upstream in the value chain or the vertical customer network to develop its own products.

Practical implications – How a small subcontractor in a low-cost country can learn from more experienced exporters on how to develop their international business marketing network capabilities.

Originality – The study is unique in that it applies the perspective of the low-cost country subcontractors. Traditionally subcontracting is studied from the contractors' point of view.

Succeeding in export markets remains a challenging task for small and medium enterprises (SMEs) operating in developing countries. Empirical studies from these regions on SMEs’ internationalisation remain scarce bringing contrasting evidence to those emerging from developed countries. To increase understanding on these issues, the present study adopts a novel fuzzy-set comparative analysis technique to investigate the combination(s) of different resource factors driving Algerian SMEs’ export performance. Using a sample of 103 exporters, the study identifies two distinct resource configurations likely to boost SMEs export performance. The present study holds important implications for the internationalisation literature and the export promotion organisations in developing countries.

In this chapter, we explore the effect of export exit on subsequent firm performance in a sample of 13,629 Belgian small and medium-sized enterprises (SMEs). We find that firms that stop exporting have lower profitability and profitability declines even further after they exit foreign markets. Firms that were highly dependent on revenues from exports and firms exiting multiple markets are more negatively affected, as reflected in lower post-exit survival rates and profitability. However, export duration or exiting institutionally distant markets does not have a significant impact on subsequent firm performance. Finally, although firm performance is negatively affected by exit, failed internationalization does not always lead to firm failure. Theoretical and practitioner implications are discussed.

Purpose: This chapter uses the different models developed in international business and the international experience of small- and medium-sized enterprises (SMEs) to propose efficient ways of confronting globalization.

Design/methodology/approach: The positive experience of SMEs in countries driven by the pursuit of efficiency and innovation was analyzed, taking into account the stages of the development of the country. Uniqueness, cooperation, coalition, and integration are the key to success in the global market, as illustrated by case studies.

Findings: Factor-driven SMEs have the choice of contract marketing based on specialization or of increasing efficiency and establishing various kinds of coalition or cooperation. Efficiency- and innovation-driven SMEs can improve their global position by offering some unique value, by participating in or initiating a coalition, or by establishing strategic alliances with a multinational corporation.

Practical implications: Analysis of case studies illustrating each model of globalization helps the SMEs in selecting a relevant international business strategy over time.

Originality/value: Each model of globalization is illustrated by SMEs that have successfully implemented it.

The volatile and ambiguous state of the global economy is changing prerequisites in the corporate environment paradigm. Contemporary small- and medium-sized businesses fill in the gaps in the value chains originally created by big businesses. Such a change in the global environment is calling for a completely new system of values bringing on new challenges for small- and medium-sized enterprises (SMEs). The smart solution to overcome the barriers might be found in the course of sustainable development. The idea of sustainable development of the world economy was originally developed by large corporations and governments of different countries based on scarcity and irresponsible use of natural resources. The corporate approach is to gain positive economic effect through implementation of large-scale projects to transform business models. The society, as the main recipient of the ‘products’ of business and state activities, represents its interests in a heterogeneous way; In fact, there is ample evidence this is due to a number of social, economic, political and cross-cultural factors. In correlation with the above-mentioned vectors of interests of global stakeholders, the implementation of sustainable development policies includes the development of new products; the reorganization of production, incentive and process assessment systems; as well as leading cross-functional organizational changes. Despite the commitment of senior management and institutional efforts to spread the concept of sustainable development via global corporations, practical cases are often characterized by organizational resistance and inertia. According to some authors, cultural, structural and routine communications – emerging at different corporate levels – become agents of influence on large, medium and small firms (Banerjee, 2008). Such a combination of economic and social processes forms a special environment for the development of contemporary SMEs in Europe. The chapter pinpoints the challenges and drivers for SMEs’ development in an ambiguous environment, as well as the prerequisites for the formation of sustainable development of the business as a state of art.

In this chapter, the authors examine trust and social networks among entrepreneurs operating in a developing market context. At the centre of this study, trust emerges from the interplay of a range of cultural-specific factors, each of which describes how social relations shape economic action. Using case studies of exporting Nigerian small and medium sized enterprises, the authors document how exporting arrangements are enforced across West African markets. Interview data reveal how entrepreneurs take advantage of indigenous trust-based relationships to enforce exporting agreements. It is clear that exporting activities are shaped by trust and networks of kinship and market associations that permeate the West African region. This chapter facilitates a better understanding of trust and the range of indigenous relationships that underpin exporting activities in Nigeria and particularly across West Africa.