Dynamic capability of the firm: analysis of the impact of internationalisation on SME performance in an emerging economy
International Journal of Emerging Markets
ISSN: 1746-8809
Article publication date: 27 July 2021
Issue publication date: 14 November 2023
Abstract
Purpose
Internationalisation is considered as a key strategy for the growth of Small and Medium Enterprises (SMEs). The purpose of this paper is to examine the relationship between dynamic capability, SMEs internationalisation and firm performance in the context of emerging economies and to evaluate the impact of financial, asset and market expansion on internationalisation of SMEs.
Design/methodology/approach
Using primary data from 212 SMEs from Bangladesh, structural equation modelling and mathematical (hierarchical reflective) model, the analysis enabled the measurement of the casual relationship on the impacts of internationalisation.
Findings
The results revealed that internationalisation of SMEs has significant impact on both financial and non-financial performance of SMEs in an emerging economy- Bangladesh. The paper found internationalisation impacts on two dimensions (financial and non-financial) with eight defined indicators – higher sales, higher profit, assets maximisation, market expansion, competitive advantage, better reputation, better customer service and added knowledge.
Originality/value
Despite several studies that examine the relationship between SME internationalisation and firm performance, limited research exists on emerging economies. This is contrary to the fact that SMEs are one of the main vehicles for growth in those economies such as Bangladesh. In this research, the authors use the theories of dynamic capabilities to conceptualise how internationalisation becomes a core SME capability for SMEs in an emerging economy.
Keywords
Citation
Rahman, M., Hack-Polay, D., Shafique, S. and Igwe, P.A. (2023), "Dynamic capability of the firm: analysis of the impact of internationalisation on SME performance in an emerging economy", International Journal of Emerging Markets, Vol. 18 No. 9, pp. 2383-2401. https://doi.org/10.1108/IJOEM-02-2021-0236
Publisher
:Emerald Publishing Limited
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