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Barriers to internationalization: A study of small and medium enterprises in India

Author

Listed:
  • Ankur Roy

    (Management Development Institute)

  • Chandra Sekhar

    (ABV-Indian Institute of Information Technology and Management)

  • Vishal Vyas

    (ABV-Indian Institute of Information Technology and Management)

Abstract

Small and medium enterprises (SMEs) play a significant role in the growth of the economy. Many SMEs have set up activities beyond their home markets, and their role is more important in contributing to future growth. They are confronted with international competition and forced to compete in international markets. In this study, authors have categorized obstacles to firm internalization as internal and external barriers. The three dimensions of external barriers include governmental and economic political/legal barriers, procedural, and currency barriers, and task and socio-cultural barriers. The internal barriers considered for the purpose of the study were informational barrier, managerial barriers, financial barriers, and marketing barriers. Authors have used adapted scale from previous researches in these domains. Database accumulated the SMEs that were involved in manufacturing activities in the state of Rajasthan, India. The measurement model is a confirmatory factor analysis. The measures used within this study were within the acceptable levels supporting the reliability of the constructs. The analysis of the data revealed that there was moderate correlation between the external and internal factors. Within the external factors, procedural and currency barriers showed the highest obstacle for SMEs in their pursuit for internationalization followed by task and socio-cultural factors. Results specified that the entrepreneurs were not able to handle and manage foreign exchange fluctuations due to their lack of knowledge in this field.

Suggested Citation

  • Ankur Roy & Chandra Sekhar & Vishal Vyas, 2016. "Barriers to internationalization: A study of small and medium enterprises in India," Journal of International Entrepreneurship, Springer, vol. 14(4), pages 513-538, December.
    • Handle: RePEc:kap:jinten:v:14:y:2016:i:4:d:10.1007_s10843-016-0187-7
    DOI: 10.1007/s10843-016-0187-7
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