International Performance of SMEs’ International Strategic Groups

Abstract

The present research focuses on whether the different combinations of the micro, small and medium-sized enterprises’ (SMEs) international scale and scope affect their international performance differently. The major purpose of this research is to study the paramount relationship between the SMEs’ international strategies and international performance. With a sample composed of 307 international SMEs, our empirical analysis defines three different strategic groups regarding the scale and scope of internationalization, that is, a high, medium and low international exposure of the firms. The scope, as an important international strategic dimension, is taken from two angles, the number of countries and the number of regional blocs where the firms operate. We assessed the strategic groups’ implications on the firms’ international performance. The latter was taken as a multidimensional construct composed of the financial, strategic and overall international performance respectively. We used the hierarchical regression analysis to test our hypotheses, and major results emerged. Higher levels of commitment with the international markets lead to better financial, strategic and overall international performances. These results are of utmost importance from the theoretical point of view and for the strategic decision-making of SMEs, opening new avenues for future studies.

How Dynamic Managerial Capabilities, Entrepreneurial Orientation, and Operational Capabilities Impact Microenterprises’ Global Performance

“…In fact, GP has a slight negative skewness, indicating a slight skewness towards well-performing companies. GP, itself, is a comparative measure, where the respondents are encouraged to rate the GP of their firm in comparison across time and to competitors [98].…”

“…CI's items were taken from the Jaworski & Kohli (1993) [79] scale, also widely used [80]. Finally, to measure GP, we used the Cabral & Carvalho (2020) [98] scale, adapted from Jaworski & Kohli (1993) [79], measuring overall performance on the last year, previous three years, and in relation to competitors in the last year. In all items the care was taken to ensure their applicability to microenterprises' reality.…”

Networking capability as an effort for SMEs to internationalize

“…Globalization requires SMEs to be tougher and more competitive in facing the market, seizing opportunities and achieving performance through good internationalization (Lecerf & Omrani, 2020). The performance of SMEs is increasingly at stake, the global economy emphasizes the importance of an internationalization strategy for all businesses, including SMEs (Cabral, Carvalho, & Ferreira, 2020); (Demeke & Tsoka, 2015). SMEs that are proactive with international markets, can achieve higher economies of scale, leading to profitability and growth (Lobo et al, 2020).…”

“…On the other hand, SMEs that do not adapt to the demands of internationalization may lose competitiveness, and their performance will decline and have difficulty accessing resources (Dabić et al, 2020). However, SMEs still have to be careful, internationalization is closely related to uncertainty and a high level of complexity and requires the involvement of various types of resources, while SMEs generally have limited resources and experience in international markets (Cabral, Carvalho, & Ferreira, 2020); (Dabić, Maley, Dana, Novak, Pellegrini, & Caputo, 2020). Several studies on the decision of SMEs to internationalize are associated with risk taking by SME owners or the type of SME owner (Chen, Tsung Hsu, & Yi Chang, 2014); (Cabral, Carvalho, & Ferreira, 2020), associated with Innovation (Dominguez, 2018), and the supporting factors of SMEs to internationalize (Demeke & Tsoka, 2015).…”

Applying the Balanced Scorecard and Predictive Analytics in the Administration of a European Funding Program

“…The research data have revealed that there is an urgent need for Small and Medium-sized Enterprises (SMEs) to participate in all dimensions of international exchange as a very important contributor to economic development worldwide, as well as an important tool in dealing with many developmental issues in rapidly developing and developed countries (Prasanna et al 2019). The internationalization of SMEs is a critical new field of studies within the majority of international markets (Cabral et al 2020). Because of their large number, including the size of their workforce, SMEs play an increasingly competitive role in global markets.…”