Internationalization as a "Work-Around" Strategy: How Going Abroad Can Help Smes Overcome Local Constraints

Omer, Nasraldin; Burg, Elco van; Peters, Ricardo M.; Visser, Kobus

doi:10.1142/s1084946715500119

Cited by 13 publications

(9 citation statements)

References 51 publications

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“…Firms in nations with higher levels of corruption, crime, theft and disorder, and political instability face additional challenges to business growth. In the case of South Africa, Omer et al (2015) propose that an effective way of dealing with this barrier is to enter the international market via exporting. In this way, firms circumvent the corruption of domestic markets and are less affected by domestic barriers to growth.…”

Section: Country-level Factorsmentioning

confidence: 99%

Barriers to enterprise development in the Caribbean

Drinkwater

Lashley

Robinson

2018

Entrepreneurship & Regional Development

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Caribbean 1 economies have suffered from stagnant growth since the 1990s. This can be a feature of small developing economies and is a major concern for policy-makers. In this paper, we examine establishment-level data to gain a better understanding of the factors that constrain the growth of businesses in the region. In addition to documenting broad differences in obstacles to business within and across the region, we particularly focus on the main obstacles affecting small and medium-sized firms. The econometric analysis highlights three main barriers at a regional level: an inadequately educated workforce; access to finance; and crime, theft and disorder.However, there are variations at the country level and the analysis indicates clusters of countries that experience obstacles to similar degrees. The paper concludes with recommendations for alleviating the constraints to enterprise development and in stimulating economic growth.

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Section: Country-level Factorsmentioning

confidence: 99%

Barriers to enterprise development in the Caribbean

Drinkwater

Lashley

Robinson

2018

Entrepreneurship & Regional Development

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“…We focus on SMEs' because their international activities are generally limited to export and therefore are ideal for examining the relationship between productivity and exports. In addition, SMEs contribute over 50% towards GDP in African countries and represent over 90% of private business in Africa (Omer, Van Burg, Peters, & Visser, 2015).…”

Section: Introductionmentioning

confidence: 99%

Testing the self-selection theory in high corruption environments: evidence from African SMEs

Gomes

Vendrell‐Herrero

Mellahi

et al. 2018

IMR

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This article is c Emerald Group Publishing and permission has been granted for this version to appear here (http://dro.dur.ac.uk/23861/). Emerald does not grant permission for this article to be further copied/distributed or hosted elsewhere without the express permission from Emerald Group Publishing Limited.Additional information: Use policyThe full-text may be used and/or reproduced, and given to third parties in any format or medium, without prior permission or charge, for personal research or study, educational, or not-for-prot purposes provided that:• a full bibliographic reference is made to the original source • a link is made to the metadata record in DRO • the full-text is not changed in any way The full-text must not be sold in any format or medium without the formal permission of the copyright holders.Please consult the full DRO policy for further details. Purpose: Whilst substantial evidence from low corruption, developed market environments supports the view that more productive firms are more likely to export, there has been little research into analysing the link between productivity and exports in high corruption, developing market environments. The purpose of this paper is twofold. First, to test the premise of selfselection theory whether the association between productivity and export is maintained in high corruption environments, and second to identify other variables explaining export activity in high corruption contexts, including cluster networks and firms' competences.Design/methodology/approach: The authors draw on the World Bank Enterprise survey to undertake a cross-section analysis including 1,233 SMEs located in nine African countries. The advantage of this database is that it contains information about the level of perceived corruption at firm-level. Logistic regressions are performed for the full sample and for subsamples of firms in high and low corruption environments.Findings: The findings demonstrate that the self-selection theory only applies to low corruption environments, whereas in high corruption environments, alternative factors such as cluster networks and outward looking competences, exert a stronger influence on the exporting activity of African SMEs. Research implications/limitations:This research contributes to theory as it provides evidence that contradicts the validity of self-selection theory in high corruption environments. Our findings would benefit from further longitudinal investigation. Practical implications:African SMEs need to consider cluster networks and outward looking competences as important strategic factors that might enhance their international competitiveness.Originality/value: Our criticism of the self-selection theory is distinctive in the literature and has important implications for future research. We show that the contextualisation of existing 2 theories matters and this opens a research avenue for further more sensitive contextualisation of existing theories in developing economies.

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“…Research admits that it may be in the best interests of many SMEs to go international (Devine & Kiggundu, 2016). Omer et al (2015) show that internationalization helps SMEs permit to avoid government barriers to accelerate growth. In fact, internationalization allows SMEs to engage in foreign markets and also to create an important information network to make export activities easier (Gimede 2004).…”

Section: Internationalization Of African Smesmentioning

confidence: 99%

“…In fact, internationalization allows SMEs to engage in foreign markets and also to create an important information network to make export activities easier (Gimede 2004). Nevertheless, while African firms can overcome some difficulties in their home countries through internationalization, lack of government support is more likely to hurt their export efficiency (Omer et al 2015).…”

Section: Internationalization Of African Smesmentioning

confidence: 99%

“…They include the lack of capital and international marketing skills. Thus, they include poor technology; imperfect and imprecise foreign market information; inefficient legal and regulatory frameworks; wasteful government policies for the SMEs; cultural differences; barriers to export such as high tariffs and permanent volatile input and output markets (Matanda 2012;Omer et al 2015).…”

Section: Internationalization Of African Smesmentioning

confidence: 99%

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Internationalization of African SMEs: Context, Trends and Challenges

Guili

2018

SSRN Journal

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There has been an important increase in the international and inter-continental operations of African SMEs over the last decade, because of the emergence of regional "champions", able to compete with foreign multinationals, present in the continent since many decades, but also because of the emergence of innovative and creative SMEs, capable to meet the market needs of various consumers of Africa. Understanding the particular international business landscape in Africa draws attention to several ignored research questions and research aspects, requiring further research and exploration, to contextualize the SMEs' internationalization of African firms. This paper highlights relevant areas/aspects needed while studying the internationalization of SMEs, by bringing back the historical context of the continent. Next, this paper contributes to the understanding of the internationalization of African SMEs by analyzing the trends and opportunities of the research in this field. Finally, the challenges and the risks of the internationalization of African firms will be analyzed, in order to set the limits of the nature of internationalization of the continent's SMEs.

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Internationalization as a "Work-Around" Strategy: How Going Abroad Can Help Smes Overcome Local Constraints

Cited by 13 publications

References 51 publications

Barriers to enterprise development in the Caribbean

Barriers to enterprise development in the Caribbean

Testing the self-selection theory in high corruption environments: evidence from African SMEs

Internationalization of African SMEs: Context, Trends and Challenges

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