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Structural and competitive determinants of globally oriented small- and medium-sized enterprises: An empirical analysis

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Abstract

This paper examines the factors influencing the internationalization of the activities of small- and medium-sized enterprises (SMEs) as an entrepreneurial response to the opportunities and threats posed by the increasing globalization of the economic system. Findings from agricultural equipment manufacturers indicate that size, international experience, innovation, and distinctiveness have a direct influence on the degree in internationalization by SMEs. Scanning, learning, and networking have some influence on the extent of internationalization of SME activities but only indirectly through other variables. Competition intensity and uncertainty also have an indirect impact on internationalization, but standardization does not. Relative importance of each determinant is ascertained and the impact of SME internationalization activities on performance is assessed.

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Notes

  1. One could be surprised by the low number of employees and the high number of years of existence in this sample. We think that this is due to the nature of the machinery industry that is mature and highly consolidated. In 2005, the three top producers accounted for 32.4% of the market estimated at $70.2 billions, and 40% of the world output was part of foreign trade. “A figure of $1 billion in sales is cited as the threshold level for entry into the industry on a worldwide scale” (Mehta and Gross, 2007: 72). These factors can put some limits to the growth of SMEs that will concentrate on specialized or niche markets at home or abroad.

  2. Although these values are more or less used as rules of thumb to avoid drawing conclusions with unreliably measured constructs, it should be kept in mind that they are arbitrary and that the low value of an item can have three major possible causes: its unreliability due to random error for example, the method factor where the item shares more in common with items in other constructs than it does with items in the construct that it measures, or the multidimensional nature of the construct to which the item is linked.

  3. Values of correlations for the whole sample and non-GOSMEs sample can be obtained from authors upon request. However, they can be calculated from R 2 and path coefficient values as indicated later in this paper, or by comparing square roots of AVE in “Appendix 2” to the correlations in Table 5 (but only correlations for hypotheses are available on this table).

  4. Given the small size of our samples and the need to compare GOSMEs to non-GOSMEs, we have retained 10% as the level of significance in this part of the analysis. However, the level of 5% will be considered later when considering the GOSMEs only.

  5. For example, as indicated earlier in this paper, the farm equipment industry is mature. Therefore, it could be interesting to compare these findings with those of a study of SMEs from an emerging industry.

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Acknowledgment

We would like to thank the Editor and the two reviewers for their constructive comments and suggestions. They have contributed to improve the quality of the paper. However, we are responsible for the opinions expressed in this paper.

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  1. Faculty of Business Administration, University of Regina, Regina, SK, Canada, S4S 0A2

    Jean-Marie Nkongolo-Bakenda, Robert Anderson, Jack Ito & Garnet Garven

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  1. Jean-Marie Nkongolo-Bakenda
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  2. Robert Anderson
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  3. Jack Ito
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Correspondence to Jean-Marie Nkongolo-Bakenda.

Appendices

Appendix 1

Table 8 Sample of questions
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Appendix 2

Table 9 Contents of constructs modified after removal of some items with low parameters
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Nkongolo-Bakenda, JM., Anderson, R., Ito, J. et al. Structural and competitive determinants of globally oriented small- and medium-sized enterprises: An empirical analysis. J Int Entrep 8, 55–86 (2010). https://doi.org/10.1007/s10843-010-0048-8

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