The Growth Challenge ofWestern smes in Emerging Markets: An Exploratory Framework and Policy Implications

Abstract

In this paper, we explore the main inhibiting factors associated with the process of entry and escalation of smes in international markets, with a focus on Emerging Markets. We identify and propose seven main categories of Institutional Voids and three main types of resources that may critically determine smes' performances on ems, namely, internationalization knowledge, social capital resources and marketing capabilities. Institutional Voids and resources are brought together within a conceptual framework suggesting that resource-scarce smes will hold back in their attempts to commit further to Emerging Markets and will be further dissuaded the higher the Institutional Voids in the market. The paper contributes to the policy literature on sme internationalization by focusing on two areas of public policy action that could have a clear and manifest impact on smes conduct in Emerging Markets, the first related to the resources available to and exploitable by smes and the latter associated with Institutional Voids.

Foreign market knowledge, international opportunity recognition, and the performance of export‐manufacturing firms

“…New knowledge encourages firms to enter the new and distant markets and escalate a firm's existing commitments in the international market (Francis & Collins‐Dodd, 2004). The firm acquires internationalization knowledge because it wants to capitalize on its resources and build competitive capabilities (Ruzzier, Akbar, Bortoluzzi, & Tracogna, 2017). Therefore, this study proposes:H3 : Internationalization knowledge positively enhances the IOR process of exporting manufacturing firms.…”