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Internationalization As A "Work-Around" Strategy: How Going Abroad Can Help Smes Overcome Local Constraints

Author

Listed:
  • NASRALDIN OMER

    (Department of Accounting and Finance, College of Business Studies, Sudan University of Science and Technology, P. O. Box 407 Khartoum, Sudan)

  • ELCO VAN BURG

    (Department of Management and Organization, Faculty of Economics and Business Administration, VU University Amsterdam, De Boelelaan 1105, 1081 HV Amsterdam, the Netherlands)

  • RICARDO M. PETERS

    (School of Business and Finance, Faculty of Economic and Management Sciences, University of the Western Cape, Private Bag X17 Bellville, South Africa)

  • KOBUS VISSER

    (Faculty of Economic and Management Sciences, University of the Western Cape, Private Bag X17 Bellville, South Africa)

Abstract

The economic environment and associated constraints have significant and unequal effects on Small and medium enterprises (SMEs). Constraints have been used, among other growth factors, to understand why some SMEs fail to grow while others foster. However, beyond knowing the effects or constraints, it is important entrepreneurs know how they can avoid constraints. The study provides an important contribution by showing that South-African SMEs that face constraints because of competition, government rules and regulations, financing gaps and corruption, can navigate away from these constraints by going international. The evidence shows a positive moderating effect of internationalization on the relationship between local constraints and SME growth. However, the results also reveal that lack of government support is a significant constraint to growth when SMEs export internationally.

Suggested Citation

  • Nasraldin Omer & Elco Van Burg & Ricardo M. Peters & Kobus Visser, 2015. "Internationalization As A "Work-Around" Strategy: How Going Abroad Can Help Smes Overcome Local Constraints," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 20(02), pages 1-22.
    • Handle: RePEc:wsi:jdexxx:v:20:y:2015:i:02:n:s1084946715500119
    DOI: 10.1142/S1084946715500119
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    Citations

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    Cited by:

    1. Hamza El Guili, 2018. "Internationalization of African SMEs: Context, Trends and Challenges," Proceedings of the 11th International RAIS Conference, November 19-20, 2018 020HG, Research Association for Interdisciplinary Studies.
    2. Yassaman Saadatmand & Dennis Barber, 2019. "Globalization, Gender And Entrepreneurial Activities In Latin America," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 24(04), pages 1-22, December.
    3. Irina Ervits & Malgorzata Zmuda, 2018. "A cross-country comparison of the effects of institutions on internationally oriented innovation," Journal of International Entrepreneurship, Springer, vol. 16(4), pages 486-503, December.
    4. Hadia Fakhreldin, 2018. "Examining the Effect of Cultural Intelligence on the Internationalization of Swiss Small and Medium Enterprises," International Business Research, Canadian Center of Science and Education, vol. 11(6), pages 89-101, June.

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