Abstract
What barriers constrain the international trade of sub-Saharan African (SSA) small and medium-scale enterprises (SMEs) along the Belt and Road? This study examines the perceptions of international trade barriers expressed by managers and executives of SMEs in SSA. A questionnaire survey was conducted among 435 SMEs. The study focused on SMEs involved in international trade with China and other nations along the Belt and Road and are operating in the manufacturing, construction, trade, and service industries. The data was analyzed using a structural equation modeling technique. Analysis of the data revealed four significant barriers: organizational capability barriers, information/knowledge barriers, networking barriers, and governmental barriers. Furthermore, the study uncovered that SMEs in the three sectors experience varying extents of perception of the identified barriers. Surprisingly, we did not find resource-specific barriers and political-legal barriers to significantly influence the international trade of SMEs along the Belt and Road. This implies that SMEs internationalizing along the Belt and Road may not be subject to similar traditional trajectories experienced by their counterparts internationalizing outside the Belt and Road region. We discussed the theoretical, policy, and practical implications of this study.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
Data availability
Data would be made available upon request.
Code availability
Not applicable.
References
Adomako, S., Amankwah-Amoah, J., Dankwah, G. O., Danso, A., & Donbesuur, F. (2019). Institutional voids, international learning effort and internationalization of emerging market new ventures. Journal of International Management, 25(4), 100666. https://doi.org/10.1016/J.INTMAN.2019.04.001
Ahimbisibwe, G. M., Ntayi, J. M., Ngoma, M., Bakunda, G., & Kabagambe, L. B. (2020). The internationalization of small to medium-sized enterprises: Do all levels in international networking matter? Journal of Small Business and Enterprise Development, 27(5), 817–837. https://doi.org/10.1108/JSBED-09-2019-0313/FULL/XML
Al-Hyari, K., Al-Weshah, G., & Alnsour, M. (2012). Barriers to internationalization in SMEs: Evidence from Jordan. Marketing Intelligence and Planning, 30(2), 188–211. https://doi.org/10.1108/02634501211211975/FULL/XML
Al-Kwifi, O. S., Frankwick, G. L., & Ahmed, Z. U. (2019). Achieving rapid internationalization of sub-Saharan African firms: Ethiopian Airlines’ operations under challenging conditions. Journal of Business Research, 119, 663–673. https://doi.org/10.1016/j.jbusres.2019.02.027
Alon, I., Chen, S., & Mandolfo, M. (2019). Supply chain – marketing integration: How do European SMEs go to China via the New Silk Road. Business Process Management Journal, 25(2), 368–378. https://doi.org/10.1108/BPMJ-04-2018-0106/FULL/XML
Amoako, I. O., & Matlay, H. (2015). Norms and trust-shaping relationships among food-exporting SMEs in Ghana. The International Journal of Entrepreneurship and Innovation, 16(2), 123–134. https://doi.org/10.5367/IJEI.2015.0182
Bahoo, S., Alon, I., & Paltrinieri, A. (2020). Corruption in international business: A review and research agenda. International Business Review, 29(4), 101660. https://doi.org/10.1016/J.IBUSREV.2019.101660
Banwo, A. O., Du, J., & Onokala, U. (2017). The determinants of location specific choice: Small and medium-sized enterprises in developing countries. Journal of Global Entrepreneurship Research, 7(16), 1–17. https://doi.org/10.1186/s40497-017-0074-2
Barasa, L., Knoben, J., Vermeulen, P., Kimuyu, P., & Kinyanjui, B. (2017). Institutions, resources and innovation in East Africa: A firm level approach. Research Policy, 46(1), 280–291. https://doi.org/10.1016/J.RESPOL.2016.11.008
Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99–120. https://doi.org/10.1177/014920639101700108
Boso, N., Oghazi, P., & Hultman, M. (2017). International entrepreneurial orientation and regional expansion. Entrepreneurship and Regional Development, 29(1–2), 4–26. https://doi.org/10.1080/08985626.2016.1255430
Buckley, P. J. (2020). China’s Belt and Road Initiative and the COVID-19 crisis. Journal of International Business Policy, 3(3), 311–314. https://doi.org/10.1057/S42214-020-00063-9/METRICS
Cahen, F. R., Lahiri, S., & Borini, F. M. (2016). Managerial perceptions of barriers to internationalization: An examination of Brazil’s new technology-based firms. Journal of Business Research, 69(6), 1973–1979. https://doi.org/10.1016/J.JBUSRES.2015.10.143
Chaplin, H. (2013). An investigation of the barriers to internationalisation faced by young technology-intensive firms. New Technology Based Firms in the New Millennium, 10, 33–52. https://doi.org/10.1108/S1876-0228(2013)0000010005
Cheru, F. (2016). Developing countries and the right to development: A retrospective and prospective African view. Third World Quarterly, 37(7), 1268–1283. https://doi.org/10.1080/01436597.2016.1154439
Christensen, C. H., da Rocha, A., & Gertner, R. K. (1987). An empirical investigation of the factors influencing exporting success of brazilian firms. Journal of International Business Studies, 18(3), 61–77. https://doi.org/10.1057/PALGRAVE.JIBS.8490412
Contractor, F. J. (2013). ‘Punching above their weight’: The sources of competitive advantage for emerging market multinationals. International Journal of Emerging Markets, 8(4), 304–328. https://doi.org/10.1108/IJOEM-06-2013-0102/FULL/XML
Damuri, Y.R., Perkasa, V., Atje, R. & Hirawan, F. (2019). Perceptions and readiness of Indonesia towards the Belt and Road Initiative: understanding local perspectives, capacity, and governance. Centre for Strategic and International Studies, 2019. JSTOR. Available at: https://www.jstor.org/stable/resrep25409. Accessed 1 Feb 2023.
Eisenhardt, K. M., & Martin, J. A. (2000). Dynamic capabilities: What are they? Strategic Management Journal, 21, 1105–1121. https://doi.org/10.1002/1097-0266
Fornell, C., & Larcker, D. (1981). Evaluating structural equation models with unobservable variables and measurement error. Journal of Marketing Research, 18(1), 39–50.
Githaiga, N., Burimaso, A., & Ahmed, S. M. (2019). The Belt and Road Initiative: Opportunities and risks for Africa’s connectivity. China Quarterly of International Strategic Studies, 1(5), 117–141.
Görg, H. & Mao, H. (2020). Does the Belt and Road Initiative stimulate Chinese exports? The role of state-owned enterprises, KCG Working Papers, Kiel Centre for Globalization (KCG), pp. 1–24.
Green BRI Center. (2020). Countries of the Belt and Road Initiative (BRI). Available at https://Green-Bri.Org/Countries-of-the-Belt-and-Road-Initiative-Bri/. Accessed 3 Apr 2022.
Gurin, N., How, P. D. S., Jackson, S. A., & Yu, P. N. (2015). How significant are the security and political risks and threats to China’s grand westward strategy in Central Asia? University of Hong Kong Libraries.
Gyamerah, S., He, Z., Gyamerah, E.E.-D., Asante, D., Ahia, B. N. K., & Ampaw, E. M. (2022). Implementation of the Belt and Road Initiative in Africa: A firm-level study of sub-Saharan African SMEs. Journal of Chinese Political Science, 27(4), 719–745. https://doi.org/10.1007/S11366-021-09749-0
Gyamerah, S., He, Z., Ampaw, E. M., Asante, D., & Asare-Kyire, L. (2021). The Belt and Road initiative and East African small and medium sized enterprises: benefits, drivers and particular sectors. International Journal of Emerging Markets, 18(2), 463–482. https://doi.org/10.1108/IJOEM-08-2020-1000
Hafner, M. & Knack, A. (2022). China Belt and Road Initiative: measuring the impact of improving transport connectivity on international trade. Available at https://www.Rand.Org/Randeurope/Research/Projects/China-Belt-and-Road-Initiative.Html. Accessed 20 May 2020.
Hair, J. F., Black, W. C., Babin, B. J., & Anderson, R. (2010). Multivariate data analysis: a global perspective (7th ed.). Pearson Education.
Hashim, F. (2015). SMEs’ impediments and developments in the internationalization process: Malaysian experiences. World Journal of Entrepreneurship, Management and Sustainable Development, 11(2), 100–119. https://doi.org/10.1108/WJEMSD-11-2013-0055
Hin, H.C. (2020). Partnerships key as Singapore firms embark on Belt and Road. Available at https://www.Straitstimes.Com/Opinion/Partnerships-Key-as-Spore-Firms-Embark-on-Belt-and-Road. Accessed 2 Apr 2020.
Huang, Y. (2016). Understanding China’s Belt & Road Initiative: Motivation, framework and assessment. China Economic Review, 40, 314–321.
Jabeen, Z., Ali, J., & Yusuf, N. (2021). Difference in business obstacles faced by firms across sizes: Evidence from enterprise survey data of India. Journal of Global Entrepreneurship Research, 11, 71–81. https://doi.org/10.1007/s40497-021-00274-1
Jiang, Y. & Hui, Z. (2021). The Belt and Road Initiative and SMEs. In Li, Y., Zottele, A.C. (Eds.), A New Blue Ocean. https://doi.org/10.1007/978-981-15-7687-4_3
Johanson, J. & Mattsson, L.G. (1988). Internationalisation in industrial systems — a network approach. In Knowledge, Networks and Power: The Uppsala School of International Business (pp. 111–132). https://doi.org/10.1057/9781137508829_5
Johanson, J., & Vahlne, J. E. (1977). The internationalization process of the firm: a model of knowledge development and increasing foreign market commitment. Journal of International Business Studies, 8(1), 23–32. https://doi.org/10.1057/palgrave.jibs.8490676
Johnson, C.K. (2018). President Xi Jinping’s ‘Belt and Road’ Initiative: a practical assessment of the Chinese communist party’s roadmap for China’s global resurgence, Center for Strategic and International Studies. Available at https://Csisprod.S3.Amazonaws.Com/S3fspublic/Publication/160328_Johnson_PresidentXiJinping_Web.Pdf. Accessed 30 Jan 2022.
Jones, M. V., & Crick, D. (2004). Internationalising high-technology-based UK firms’ information-gathering activities. Journal of Small Business and Enterprise Development, 11(1), 84–94. https://doi.org/10.1108/14626000410519128/FULL/XML
Kahiya, E. T. (2013). Export barriers and path to internationalization: A comparison of conventional enterprises and international new ventures. Journal of International Entrepreneurship, 11(1), 3–29. https://doi.org/10.1007/S10843-013-0102-4
Kamel, M. S. (2018). China’s Belt and Road Initiative: Implications for the Middle East. Cambridge Review of International Affairs, 31(1), 76–95. https://doi.org/10.1080/09557571.2018.1480592
Kapri, K. (2019). Impact of political instability on firm-level export decisions. International Review of Economics and Finance, 59, 98–105. https://doi.org/10.1016/j.iref.2018.08.008
Khan, M.M., Mubarak, S. & Islam, T. (2020). Leading the innovation: role of trust and job crafting as sequential mediators relating servant leadership and innovative work behavior. European Journal of Innovation Management, 1–22. https://doi.org/10.1108/EJIM-05-2020-0187
Khan, W.A., Rahman, Z.U. & Ye, J. (2020). Exploring the potential determinants of Chinese OFDI towards OBOR nations: an application of gravity model. Asia-Pacific Journal of Accounting and Economics, 1–19. https://doi.org/10.1080/16081625.2020.1816184
Khavul, S., Prater, E., & Swafford, P. M. (2012). International responsiveness of entrepreneurial new ventures from three leading emerging economies. International Journal of Operations and Production Management, 32(10), 1147–1177. https://doi.org/10.1108/01443571211274503/FULL/XML
Komulainen, H., Mainela, T., & Tähtinen, J. (2006). Social networks in the initiation of a high-tech firm’s internationalisation. International Journal of Entrepreneurship and Innovation Management, 6(6), 526–541. https://doi.org/10.1504/IJEIM.2006.010979
Kujala, I., & Törnroos, J. Å. (2018). Internationalizing through networks from emerging to developed markets with a case study from Ghana to the U.S.A. Industrial Marketing Management, 69, 98–109. https://doi.org/10.1016/J.INDMARMAN.2018.01.015
Laufs, K., & Schwens, C. (2014). Foreign market entry mode choice of small and medium-sized enterprises: A systematic review and future research agenda. International Business Review, 23(6), 1109–1126. https://doi.org/10.1016/j.ibusrev.2014.03.006
Li, J., Liu, B., & Qian, G. (2019). The belt and road initiative, cultural friction and ethnicity: Their effects on the export performance of SMEs in China. Journal of World Business, No., 54, 350–359.
Li, P. P., Hofman, P. S., & Geraci, M. (2020). The Belt and Road Initiative for an intercontinental ecosystem: Strategic implications for multinational enterprises around the world. Thunderbird International Business Review, 62(3), 239–248. https://doi.org/10.1002/TIE.22129
Lin, F. J., & Lin, Y. H. (2016). The effect of network relationship on the performance of SMEs. Journal of Business Research, 69(5), 1780–1784. https://doi.org/10.1016/J.JBUSRES.2015.10.055
Masood, E. (2019). How China is redrawing the map of world science. Available at https://www.nature.com/immersive/d41586-019-01124-7/index.html. Accessed 10 Apr 2022.
Milanov, H., & Fernhaber, S. A. (2009). The impact of early imprinting on the evolution of new venture networks. Journal of Business Venturing, 24(1), 46–61. https://doi.org/10.1016/J.JBUSVENT.2007.11.001
Morini, C., Polis, M. C. B., da Silva, D., & Junior, E. I. (2021). Export barriers for SMEs from emerging market: A model of analysis for non-tech companies. BAR - Brazilian Administration Review, ANPAD - Associacao Nacional De Pos-Graduacao e Pesquisa Em Administracao, 18(4), 1–31. https://doi.org/10.1590/1807-7692BAR2021200121
Mukherjee, S. (2018). Challenges to Indian micro small scale and medium enterprises in the era of globalization. Journal of Global Entrepreneurship Research, 8(28), 1–19. https://doi.org/10.1186/s40497-018-0115-5
Nawaz, R. R., Naghavi, N., Mubarik, M. S., & Reza, S. (2021). Internationalisation challenges of SMEs: Role of intellectual capital. International Journal of Learning and Intellectual Capital, Inderscience Publishers, 1(1), 1. https://doi.org/10.1504/IJLIC.2021.10035394
North, D.C. (1990). Institutions, institutional change and economic performance, institutions, institutional change and economic performance, Cambridge University Press, Cambridge, England. https://doi.org/10.1017/cbo9780511808678
Oehme, M., & Bort, S. (2015). SME internationalization modes in the German biotechnology industry: The influence of imitation, network position, and international experience. Journal of International Business Studies, 46(6), 629–655. https://doi.org/10.1057/JIBS.2015.8
Okpara, J. O., & Kabongo, J. D. (2010). Export barriers and internationalisation: Evidence from SMEs in an emergent African economy. International Journal of Business and Globalisation, 5(2), 169–187. https://doi.org/10.1504/IJBG.2010.034394
Omokaro-Romanus, C., Anchor, J. R., & Konara, P. (2019). The internationalization of Nigerian firms: Motivations and location patterns. Thunderbird International Business Review, 61(1), 75–88. https://doi.org/10.1002/tie.21962
Osarenkhoe, A. (2008). A study of the enablers of non-sequential internationalization process among small and medium-sized firms. International Journal of Business Science and Applied Management, 3(2), 1–22.
Oz, E., Appolloni, A., Mavisu, M., & Ozeren, E. (2014). Knowledge management practices of manufacturing firms: A study from the Turkish Aegean Free Zone. International Journal of Intelligent Enterprise, 2(2/3), 169–195.
Peprah, A. A., Giachetti, C., Larsen, M. M., & Rajwani, T. S. (2021). How business models evolve in weak institutional environments: The case of Jumia, the Amazon. Com of Africa, Organization Science, 33(1), 431–463. https://doi.org/10.1287/ORSC.2021.1444
Pierre-Philippe, C., Miren, L. & Thierry, M. (2003). Can business and social networks explain the border effect puzzle?, No. CEPR Discussion Paper No. 3750, Goswell Rd, London.
Pinho, J. C., & Martins, L. (2010). Exporting barriers: Insights from Portuguese small- and medium-sized exporters and non-exporters. Journal of International Entrepreneurship, 8(3), 254–272. https://doi.org/10.1007/S10843-010-0046-X
Rahman, M., Uddin, M., & Lodorfos, G. (2017). Barriers to enter in foreign markets: Evidence from SMEs in emerging market. International Marketing Review, 34(1), 68–86. https://doi.org/10.1108/IMR-10-2014-0322/FULL/XML
Rialp, A., & Rialp, J. (2006). Faster and more successful exporters: An exploratory study of born global firms from the resource-based view. Journal of Euromarketing, 16(1–2), 71–86. https://doi.org/10.1300/J037V16N01_06
Roy, A., Sekhar, C., & Vyas, V. (2016). Barriers to internationalization: A study of small and medium enterprises in India. Journal of International Entrepreneurship, 14(4), 513–538. https://doi.org/10.1007/S10843-016-0187-7/TABLES/6
Runde, D.F., Savoy, C.M. & Staguhn, J. (2021). China and SMEs in sub-Saharan Africa: a window of opportunity for the United States, Center for Strategic and International Studies. Available at https://www.csis.org/analysis/china-and-smes-sub-saharan-africa-window-opportunity-united-states. Accessed 2 Nov 2022.
Scott, S., & Bruce, R. (1994). Determinants of innovative behavior: A path model of individual innovation in the workplace. Academy of ManagemenI Louma, 37(3), 580–607. https://doi.org/10.1049/iet-rsn:20080009
Suárez-Ortega, S. M., & Álamo-Vera, F. R. (2005). SMES’ internationalization: Firms and managerial factors. International Journal of Entrepreneurial Behaviour and Research, 11(4), 258–279. https://doi.org/10.1108/13552550510603298
Tambunan, T. T. H. (2011). Development of small and medium enterprises in a developing country: The Indonesian case. Journal of Enterprising Communities People and Places in the Global Economy, 5(1), 68–82. https://doi.org/10.1108/17506201111119626
Tang, R. W., & Buckley, P. J. (2020). Host country risk and foreign ownership strategy: meta-analysis and theory on the moderating role of home country institutions. International Business Review, 29(4), 101666. https://doi.org/10.1016/j.ibusrev.2020.101666
The Africa Competitiveness Report. (2017). Addressing Africa’s demographic dividend. World Economic Forum, 1–179.
The African Review. (2018). East African economies to enjoy sustained economic growth. Available at http://www.Africanreview.Com/Finance/Economy/East-African-Economies-to-Enjoy-Sustained-Economic-Growth. Accessed 23 Jan 2020.
Uner, M. M., Kocak, A., Cavusgil, E., & Cavusgil, S. T. (2013). Do barriers to export vary for born globals and across stages of internationalization? An Empirical Inquiry in the Emerging Market of Turkey, International Business Review, 22(5), 800–813. https://doi.org/10.1016/J.IBUSREV.2012.12.005
Vahlne, J. E., & Johanson, J. (2013). The Uppsala model on evolution of the multinational business enterprise – from internalization to coordination of networks. International Marketing Review, 30(3), 189–210. https://doi.org/10.1108/02651331311321963/FULL/XML
Van Assche, A., & Lundan, S. (2020). From the editor: COVID-19 and international business policy. Journal of International Business Policy, 3(3), 273–279. https://doi.org/10.1057/S42214-020-00065-7
Wang, Q., & Liu, B. (2022). State equity and outward FDI under the theme of belt and road initiative. Asia Pacific Journal of Management, 39(3), 877–897. https://doi.org/10.1007/S10490-020-09716-Y
Witte, C. T., Burger, M. J., & Pennings, E. (2020). When political instability devaluates home-host ties. Journal of World Business, 55(4), 101077. https://doi.org/10.1016/j.jwb.2020.101077
Wu, Z., Hou, G., & Xin, B. (2020). Has the Belt and Road Initiative brought new opportunities to countries along the routes to participate in global value chains?”. SAGE Open, 10(1), 1–12. https://doi.org/10.1177/2158244020902088
Yeganeh, K. H. (2016). An examination of the conditions, characteristics and strategies pertaining to the rise of emerging markets multinationals., European Business Review. No., 28, 600–626.
Yu, S., Qian, X., & Liu, T. (2019). Belt and road initiative and Chinese firms’ outward foreign direct investment. Emerging Markets Review, No., 4, 1–22.
Zahoor, N., Khan, Z., Meyer, M., & Laker, B. (2023). International entrepreneurial behavior of internationalizing African SMEs – towards a new research agenda. Journal of Business Research, 154, 113367. https://doi.org/10.1016/J.JBUSRES.2022.113367
Funding
He Zheng received research support from the Science and Technology Planning Fund of Sichuan Province, China (No. 2020JDR0117).
Author information
Authors and Affiliations
Contributions
SG conceived the idea and wrote the introduction, methodology, and data analysis. EEG drafted chapter two. ZH assisted in the review of the work.
Corresponding author
Ethics declarations
Conflict of Interest
The authors declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Rights and permissions
Springer Nature or its licensor (e.g. a society or other partner) holds exclusive rights to this article under a publishing agreement with the author(s) or other rightsholder(s); author self-archiving of the accepted manuscript version of this article is solely governed by the terms of such publishing agreement and applicable law.
About this article
Cite this article
Gyamerah, S., He, Z. & Gyamerah, E.ED. Managerial perception of barriers to internationalization: an examination of sub-Saharan Africa SMEs along the Belt and Road. J Glob Entrepr Res 13, 24 (2023). https://doi.org/10.1007/s40497-023-00370-4
Received:
Accepted:
Published:
DOI: https://doi.org/10.1007/s40497-023-00370-4