Configuring Internationalisation Readiness: An Fsqca Study of Sabah’s Smes

This study investigates the causal conditions that shape high readiness for internationalisation among small and medium-sized enterprises (SMEs) in Sabah, Malaysia. Drawing on the Dynamic Capabilities Theory, Resource-Based View, Institutional Theory, and Configuration Theory, the research applies fuzzy-set Qualitative Comparative Analysis (fsQCA) to data from 44 SMEs engaged in or preparing for cross-border activities. Five conditions, namely market uncertainty, firm resources, risk perception, international knowledge, and government support, were examined through necessity and sufficiency analyses. The necessity analysis identified government support, firm resources, and international knowledge as quasi-necessary conditions, consistently present in most high-readiness cases. The configurational results revealed six equifinal pathways to readiness, clustered into three strategic models: (1) Institutional Compensation Models, where government support offsets shortfalls in resources and international knowledge; (2) Capability-Driven Independence Models, where strong internal capacities lead high internationalisation readiness without institutional reliance; and (3) an Ideal Synergy Model, where all enabling factors align to produce the most robust internationalisation readiness. The findings highlight the context-dependent role of both the presence and absence of conditions, demonstrating that multiple, asymmetrical routes can achieve the same outcome. The study advances theoretical understanding by integrating institutional and capability perspectives within a configurational framework. It provides actionable insights for policymakers designing targeted support programmes and for managers seeking to strengthen their firms' internationalisation readiness. Limitations related to sample size, regional focus, and cross-sectional design are acknowledged, with recommendations for longitudinal, comparative, and technology-integrated extensions in future research.