How can emerging-market SMEs domestically benefit from their performance in developed countries? Empirical evidence from China

Wei Li; Zhi Liu; Senmao Xia; Ji Yan; Yu Xiong; Georgia Sakka; Rebecca Yu Li

doi:10.1016/j.jbusres.2021.12.058

How can emerging-market SMEs domestically benefit from their performance in developed countries? Empirical evidence from China

Wei Li, Zhi Liu, Senmao Xia, Ji Yan, Yu Xiong, Georgia Sakka, Rebecca Yu Li

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Abstract

Many small and medium-sized enterprises (SMEs) from emerging economies consider entry into developed markets as a way to promote home country performance. Nevertheless, the extant literature aiming at large companies are not applicable to SMEs, and it is unclear how SMEs with a weak resource basis can improve their domestic performance through overseas venturing. This study leverages a resource-based view on data from 377 Chinese SMEs with operations in developed nations. The findings reveal that emerging-market firms’ overseas performance (both financial and non-financial) is positively related to their home country performance, with the technological learning and demonstration effect playing mediating roles. The relationship between host country performance and technological learning is positively moderated by firms’ resource integration capability. This study is among the first to identify the mechanism through which emerging-market SMEs’ operations in developed countries affects their home country performance. The findings are helpful in guiding emerging-market SMEs’ internationalization.

Original language	English
Pages (from-to)	200-210
Number of pages	11
Journal	Journal of Business Research
Volume	142
Early online date	5 Jan 2022
DOIs	https://doi.org/10.1016/j.jbusres.2021.12.058
Publication status	Published - Mar 2022

Bibliographical note

NOTICE: this is the author’s version of a work that was accepted for publication in Journal of Business Research. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Journal of Business Research, 142 (2022)
DOI: 10.1016/j.jbusres.2021.12.058

© 2021, Elsevier. Licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International http://creativecommons.org/licenses/by-nc-nd/4.0/

Keywords

Internationalization
SMEs
Emerging markets
Entrepreneurship
Performance
Technological learning

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10.1016/j.jbusres.2021.12.058

Post-PrintAccepted author manuscript, 1.59 MBLicence: CC BY-NC-ND

https://www.sciencedirect.com/science/article/abs/pii/S0148296321009711

Cite this

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title = "How can emerging-market SMEs domestically benefit from their performance in developed countries? Empirical evidence from China",

abstract = "Many small and medium-sized enterprises (SMEs) from emerging economies consider entry into developed markets as a way to promote home country performance. Nevertheless, the extant literature aiming at large companies are not applicable to SMEs, and it is unclear how SMEs with a weak resource basis can improve their domestic performance through overseas venturing. This study leverages a resource-based view on data from 377 Chinese SMEs with operations in developed nations. The findings reveal that emerging-market firms{\textquoteright} overseas performance (both financial and non-financial) is positively related to their home country performance, with the technological learning and demonstration effect playing mediating roles. The relationship between host country performance and technological learning is positively moderated by firms{\textquoteright} resource integration capability. This study is among the first to identify the mechanism through which emerging-market SMEs{\textquoteright} operations in developed countries affects their home country performance. The findings are helpful in guiding emerging-market SMEs{\textquoteright} internationalization.",

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author = "Wei Li and Zhi Liu and Senmao Xia and Ji Yan and Yu Xiong and Georgia Sakka and Li, {Rebecca Yu}",

note = "NOTICE: this is the author{\textquoteright}s version of a work that was accepted for publication in Journal of Business Research. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Journal of Business Research, 142 (2022) DOI: 10.1016/j.jbusres.2021.12.058 {\textcopyright} 2021, Elsevier. Licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International http://creativecommons.org/licenses/by-nc-nd/4.0/ ",

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AU - Sakka, Georgia

AU - Li, Rebecca Yu

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PY - 2022/3

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N2 - Many small and medium-sized enterprises (SMEs) from emerging economies consider entry into developed markets as a way to promote home country performance. Nevertheless, the extant literature aiming at large companies are not applicable to SMEs, and it is unclear how SMEs with a weak resource basis can improve their domestic performance through overseas venturing. This study leverages a resource-based view on data from 377 Chinese SMEs with operations in developed nations. The findings reveal that emerging-market firms’ overseas performance (both financial and non-financial) is positively related to their home country performance, with the technological learning and demonstration effect playing mediating roles. The relationship between host country performance and technological learning is positively moderated by firms’ resource integration capability. This study is among the first to identify the mechanism through which emerging-market SMEs’ operations in developed countries affects their home country performance. The findings are helpful in guiding emerging-market SMEs’ internationalization.

AB - Many small and medium-sized enterprises (SMEs) from emerging economies consider entry into developed markets as a way to promote home country performance. Nevertheless, the extant literature aiming at large companies are not applicable to SMEs, and it is unclear how SMEs with a weak resource basis can improve their domestic performance through overseas venturing. This study leverages a resource-based view on data from 377 Chinese SMEs with operations in developed nations. The findings reveal that emerging-market firms’ overseas performance (both financial and non-financial) is positively related to their home country performance, with the technological learning and demonstration effect playing mediating roles. The relationship between host country performance and technological learning is positively moderated by firms’ resource integration capability. This study is among the first to identify the mechanism through which emerging-market SMEs’ operations in developed countries affects their home country performance. The findings are helpful in guiding emerging-market SMEs’ internationalization.

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How can emerging-market SMEs domestically benefit from their performance in developed countries? Empirical evidence from China

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