International Entrepreneurship in Emerging Markets: Nature, Drivers, Barriers and Determinants: Volume 10

This chapter provides an introduction and outlines the rationale for this book. It also specifies the organisation and structure of the chapter contributions while introducing the authors. The chapter concludes by summarising the main points of the ensuing sections and intimates on directions for further research as well as theoretical implications in the international entrepreneurship field.

Current internationalisation and international business (IB) theories are silent on the intermittent internationalising experiences of small and medium size enterprises (SMEs) from emerging economies (EEs). The aim of this chapter is to examine the role that networks play in facilitating SMEs from EEs subsequent behaviour following intermittent (exit and subsequent re-entry) internationalising experiences, and to build the theory of this process. Internationalisation of SMEs is a complex phenomenon. Utilising qualitative interview-based data from 15 Pakistani and Chinese SME entrepreneurs, industry experts and government representatives, this study concludes the following: SMEs from EEs continuously reconfigure existing products, resources and markets through networks while reducing and reviving levels of commitment with partners in international markets. Additionally, entrepreneurs from these markets proactively choose to dissolve existing relationships, withdraw from foreign markets to seek new partnerships and diversify resources to reduce foreign market uncertainty. However, some SME entrepreneurs seek to re-enter into previous markets utilising prior relationships and networks. Hence, successful management of network relationships over time is a challenge for internationalising SMEs.

The export entry behaviour of small and medium-sized enterprises (SMEs) is a complex behaviour that requires specific tools for a holistic investigation. Thus far, there are inconclusive findings in the literature on key predictors of export behaviour, which may be explained by methodological limitations. In this chapter, using a novel fuzzy-set qualitative comparative analysis for its ability to capture complex causality, the authors study the impact of managerial attributes and collaborative behaviours on SMEs’ export propensity. The analysis is based on a sample of 80 SMEs operating in the emerging country context of Turkey. Participants were selected using a non-probability sampling approach. For export propensity, it is found that no single driver is sufficient to facilitate SMEs’ export entry. Rather, a combination of managerial attributes including export knowledge, international orientation, entrepreneurial orientation and export perception is more likely to lead to export entry. Alternatively, the lack of some of these attributes could be offset by the presence of collaborative activities. Specifically, the shortage of export knowledge, international orientation and entrepreneurial orientation at any rate could be mitigated by collaborative activities. These findings hold important implications for SMEs and export promotion organisations in similar emerging contexts.

This chapter explores how the recognition of opportunities regarding developing technology and entering a new market is influenced by the systemic effect of social forces. These include institutions, social networks and the entrepreneur’s cognitive frames. This study adopts a longitudinal perspective by capturing and analysing the phenomenon in two moments: first, when the businesses started to operate domestically and second, when they began to internationalise. The cases of five Brazilian technology firms are analysed. The findings reveal the systemic and mutually reinforcing effect of these social forces on the recognition of opportunities. The entrepreneurs’ cognitive frames were particularly vital in recognising opportunities to enter the Brazilian market. The institutional support provided by universities along with government mechanisms and entrepreneurs’ social networks were essential to accrue experiential and non-experiential knowledge of international markets, therefore contributing to the recognition of international opportunities. The temporal perspective employed in this research assists the understanding of how historical events shape entrepreneurs’ capabilities to recognise and change company discourse to pursue the recognition of international opportunities. The results provide guidelines for researchers, practitioners and policy-makers, particularly in the emerging economies in Latin America, to support the growth and flourishing of entrepreneurial ventures through pursuing international opportunities.

A few decades ago, most research works on internationalisation were aligned to studies in developed economies. In recent times, business entrepreneurs in developing and emerging economies have shown their potential to permeate international markets. The current capability of business entrepreneurs in developing and emerging economies, which drives their ability to overcome the numerous barriers to internationalisation, particularly within clusters, requires a critical examination. As a result, the study situates the discussion on internationalisation within the theory of agglomeration in developing and emerging economies and argues that the gains enjoyed by business entrepreneurs from operating in close proximity in clusters are critical for overcoming the barriers of internationalisation. This research adopts a systematic review of secondary data to tease out the unique attributes of clusters in developing and emerging economies, which supports the internationalisation drive. The findings show that most emerging economy clusters are engaged in exports but there is minimal work on international entrepreneurs operating within clusters. The unique features that drive exporting clusters are the presence of multinational companies, public agencies and collaborative relationships. These unique features have the capacity to minimise the constraints to internationalisation and determine the export performance of businesses in the cluster.

This chapter conceptually addresses outward internationalisation of small and medium sized enterprises (SMEs) from the emerging markets (EMs) by focussing on the role of prior contract manufacturing relationships with a developed market multinational enterprise (DMNE). The internationalisation of SMEs originating from EMs is a rather under-researched area and the role of prior contract manufacturing experience specifically has not been addressed in prior studies. Based on a literature review, the authors identified four capabilities developed by EM SMEs during their contract manufacturing relationships with DMNE(s) that potentially help in later outward internationalisation. The authors incorporate some insights from dynamic capabilities theory, and develop propositions addressing the role of relational capital, human capital, manufacturing productivity capabilities and product innovation capabilities in this specific context. Despite being conceptual in nature, this chapter is one of the first to explicitly highlight the role of these specific capabilities developed during contract manufacturing relationship for outward internationalisation, setting bases for future studies to further empirically investigate them in different contexts.

This study develops our understanding of the internationalisation activities of ‘transnational entrepreneurs’ (TEs), namely, entrepreneurs that are socially embedded in two or more different countries, specifically, in the context of the growing phenomenon of ‘micro-multinationals’ involving small firms with income-generating assets in more than one country. The investigation involves TEs originating from South Asia (Indian Sub-continent), based in the UK clothing and textiles sectors. Limited statistical differences exist between the perceptions of 63 survey respondents with varying degrees of international sales regarding perceived barriers and assistance requirements towards operating in overseas markets. Subsequent interview data with 16 of those TEs owning micro-multinational businesses offer unique insights, suggesting their behaviour is distinct from certain existing literature involving internationalising entrepreneurs, but that they are not a homogeneous group as strategies vary. This study provides opportunities for further research to understand TEs’ practices, including those operating in different institutional contexts.

Despite the increasing number of small and medium enterprises pursuing international opportunities and penetrating global markets, international entrepreneurship literature has paid limited attention to emerging markets and entrepreneur-specific factors that influence internationalisation. Traditional internationalisation theories and international entrepreneurship theories consider organisation as the unit of analysis and lack sensitivity to the context, which influences ventures’ foreign market decisions. Moreover, only a handful of studies related to internationalisation in emerging markets are available. To address this gap, this chapter explores barriers and drivers for SMEs’ internationalisation in Sri Lanka, an emerging market. Semi-structured interviews with forty Sri Lankan youth entrepreneurs suggest structural barriers consisting of access to capital, legal restrictions and lack of legal, institutional and government support were prominent. These barriers suggest a need for policy changes in the entrepreneurial environment, finance, entrepreneurial culture and skill development, technology, research and development and regional balance. The findings also indicate that information communication technology is a driver for internationalisation.

Firms are affected by resources access, capability and unfavourable business environment, but there is little research on how institutions affect small and medium enterprises (SMEs) internationalisation process in developing countries. Drawing on institutional theory, this chapter reviews the variety of institutions (internal and external barriers) and how it affects SMEs’ internationalisation process in the developing world. First, it explores the stages of internationalisation, modes of entry and benefits of internationalisation. Second, it explains the Cultural, Administrative, Geographic and Economic (CAGE framework) distances and theories of internationalisation. Third, it examines the evidence on the role of government in promoting SMEs and drivers of internationalisation. These have significant practical and policy implications, especially for policymakers that are concerned with business reforms and ease of doing business.