Abstract
Entry to export markets can stimulate business growth, yet remarkably few small- and medium-sized enterprises (SMEs) pursue export strategies. Using data gathered from the UK Small Business Surveys and a theoretical framework that combines principles from the resource-based view of the firm with notions of “investment readiness” and “managerial capacity,” we examine the empirical relationships between new product development (NPD) and new market entry (NME) capabilities on UK SMEs export decisions. Among other things, we find that there are contexts in which SMEs should develop these capabilities concurrently and others in which they should develop them independently to minimize added managerial complexity. Our results also indicate that in the absence of strong managerial capacity, SMEs should prioritize NME over NPD capabilities. Our findings produce several interesting theoretical and practical implications for SME exports.
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Notes
NPD capability sometimes overlaps with other types of organizational capabilities, such as R&D capabilities (Guan and Ma 2003), marketing capabilities (Zou et al. 2003), and exploration capabilities (Yalcinkaya et al. 2007). In light of these ambiguities, we follow Deeds et al. (2000) by treating NPD capability as a standalone category that encapsulates a firm’s R&D potential relating to new export opportunities.
SMEs are defined as businesses with fewer than 250 employees (DBIS 2012).
Removing SME non-employers does not alter our main results significantly but reduces the sample size by approximately 20% (results available upon request).
We measure these using a 5-point scale (1 (very poor) to 5 (very strong)).
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Wai, K.W., Liston-Heyes, C., Liu, W. et al. Organizational capabilities and SME exports: the moderating role of external funding intentions and managerial capacity. Small Bus Econ 58, 247–261 (2022). https://doi.org/10.1007/s11187-020-00408-x
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DOI: https://doi.org/10.1007/s11187-020-00408-x
Keywords
- Exports
- New product development
- New market entry
- External funding intentions
- Managerial capacity
- Small- and medium-sized enterprises