IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/98419.html
   My bibliography  Save this paper

Global Challenges and Survival Strategies of the SMEs in the Era of Economic Globalization: A Systematic Review

Author

Listed:
  • Naradda Gamage, Sisira Kumara
  • Ekanayake, EMS
  • Abeyrathne, GAKNJ
  • Prasanna, RPIR
  • Jayasundara, JMSB
  • Rajapakshe, PSK

Abstract

Globalization has presented new challenges for SMEs due to the increased competition, and as a result, the mortality rate of SMEs after a shorter period of commencement is relatively high. Accordingly, SMEs necessity to adopt survival strategies and strategic decisions to succeed in the business environment facing global challenges. This study attempted to critically review the existing literature on the global challenge for SMEs to identify the survival and succeeding strategies of SMEs in the current competitive business environment. Published reports in the field by the recognized multilateral organizations and seventy-five excellent research papers published by four recognized journal publishing companies: Emerald, Elsevier, Tayler & Francis, and MDPI were selected for inclusion in this review. Based on this review, it has been found that leading global challenges for SMEs in economic globalization include: global market competition, global financial and economic crisis, information communication technology, rise of Multinational Corporations, Transnational Corporations, changing profile of consumers and their preferences, trade dumping, international terrorism and religious conflicts, and trade wars. Further research could take on survival Strategies of SMEs in the industrial level to identify the sustainability-oriented specific policies. As well as a need for a stronger theoretical examination on survival strategies of SMEs in the global challenges.

Suggested Citation

  • Naradda Gamage, Sisira Kumara & Ekanayake, EMS & Abeyrathne, GAKNJ & Prasanna, RPIR & Jayasundara, JMSB & Rajapakshe, PSK, 2019. "Global Challenges and Survival Strategies of the SMEs in the Era of Economic Globalization: A Systematic Review," MPRA Paper 98419, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:98419
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/98419/1/MPRA_paper_98419.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Xiubao Yu & Jie Yan & Dimitris Assimakopoulos, 2015. "Case analysis of imitative innovation in Chinese manufacturing SMEs : Products, features, barriers and competences for transition," Post-Print hal-02313377, HAL.
    2. Lee, Sungjoo & Park, Gwangman & Yoon, Byungun & Park, Jinwoo, 2010. "Open innovation in SMEs--An intermediated network model," Research Policy, Elsevier, vol. 39(2), pages 290-300, March.
    3. Magnus Blomström & Ari Kokko & Mario Zejan, 2000. "Multinational Corporations and Spillovers," Palgrave Macmillan Books, in: Foreign Direct Investment, chapter 8, pages 101-133, Palgrave Macmillan.
    4. Ren, Shengce & Eisingerich, Andreas B. & Tsai, Huei-Ting, 2015. "How do marketing, research and development capabilities, and degree of internationalization synergistically affect the innovation performance of small and medium-sized enterprises (SMEs)? A panel data," International Business Review, Elsevier, vol. 24(4), pages 642-651.
    5. Colombo, Massimo G. & Piva, Evila & Rossi-Lamastra, Cristina, 2014. "Open innovation and within-industry diversification in small and medium enterprises: The case of open source software firms," Research Policy, Elsevier, vol. 43(5), pages 891-902.
    6. Perera, Dinuja & Chand, Parmod, 2015. "Issues in the adoption of international financial reporting standards (IFRS) for small and medium-sized enterprises (SMES)," Advances in accounting, Elsevier, vol. 31(1), pages 165-178.
    7. Aldaba, Rafaelita M. & Aldaba, Fernando T., 2010. "Assessing the Spillover Effects of FDI to the Philippines," Discussion Papers DP 2010-27, Philippine Institute for Development Studies.
    8. Lee, Neil & Sameen, Hiba & Cowling, Marc, 2015. "Access to finance for innovative SMEs since the financial crisis," Research Policy, Elsevier, vol. 44(2), pages 370-380.
    9. Liao, Tung-Shan & Rice, John, 2010. "Innovation investments, market engagement and financial performance: A study among Australian manufacturing SMEs," Research Policy, Elsevier, vol. 39(1), pages 117-125, February.
    10. Paul, Justin & Parthasarathy, Sundar & Gupta, Parul, 2017. "Exporting challenges of SMEs: A review and future research agenda," Journal of World Business, Elsevier, vol. 52(3), pages 327-342.
    11. R�gis Blazy & Laurent Weill, 2013. "Why do banks ask for collateral in SME lending?," Applied Financial Economics, Taylor & Francis Journals, vol. 23(13), pages 1109-1122, July.
    12. Rajesh K. Singh & Suresh K. Garg & S.G. Deshmukh, 2009. "The competitiveness of SMEs in a globalized economy: Observations from China and India," Management Research Review, Emerald Group Publishing, vol. 33(1), pages 54-65, December.
    13. Crick, Florence & Eskander, Shaikh M.S.U. & Fankhauser, Sam & Diop, Mamadou, 2018. "How do African SMEs respond to climate risks? Evidence from Kenya and Senegal," World Development, Elsevier, vol. 108(C), pages 157-168.
    14. Fayolle, Alain & Liñán, Francisco, 2014. "The future of research on entrepreneurial intentions," Journal of Business Research, Elsevier, vol. 67(5), pages 663-666.
    15. Habib Ntwoku & Solomon Negash & Peter Meso, 2017. "ICT adoption in Cameroon SME: application of Bass diffusion model," Information Technology for Development, Taylor & Francis Journals, vol. 23(2), pages 296-317, April.
    16. Ye Seul Choi & Up Lim, 2017. "Contextual Factors Affecting the Innovation Performance of Manufacturing SMEs in Korea: A Structural Equation Modeling Approach," Sustainability, MDPI, vol. 9(7), pages 1-15, July.
    17. Patrik Aspers & Sebastian Kohl, 2009. "Economic Theories of Globalization," Post-Print hal-03570273, HAL.
    18. Jones, Marian V. & Coviello, Nicole & Tang, Yee Kwan, 2011. "International Entrepreneurship research (1989–2009): A domain ontology and thematic analysis," Journal of Business Venturing, Elsevier, vol. 26(6), pages 632-659.
    19. Lechner, Christian & Dowling, Michael & Welpe, Isabell, 2006. "Firm networks and firm development: The role of the relational mix," Journal of Business Venturing, Elsevier, vol. 21(4), pages 514-540, July.
    20. Gholamhossein Hosseininia & Ali Ramezani, 2016. "Factors Influencing Sustainable Entrepreneurship in Small and Medium-Sized Enterprises in Iran: A Case Study of Food Industry," Sustainability, MDPI, vol. 8(10), pages 1-20, October.
    21. Gils, Anita Van & Zwart, Peter, 2004. "Knowledge Acquisition and Learning in Dutch and Belgian SMEs:: The Role of Strategic Alliances," European Management Journal, Elsevier, vol. 22(6), pages 685-692, December.
    22. Tchankam, Jean-Paul & Feudjo, Jules Roger & Gandja, Serge Valant, 2016. "The determinants of financial structure: How to explain the “paradox of insolvency and debt” among SMEs in Cameroon?," Research in International Business and Finance, Elsevier, vol. 36(C), pages 73-84.
    23. Gary Lynch-Wood & David Williamson, 2014. "Understanding SME responses to environmental regulation," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 57(8), pages 1220-1239, August.
    24. Ryan, Robert M. & O’Toole, Conor M. & McCann, Fergal, 2014. "Does bank market power affect SME financing constraints?," Journal of Banking & Finance, Elsevier, vol. 49(C), pages 495-505.
    25. Francesco Caputo & Luca Carrubbo & Debora Sarno, 2018. "The Influence of Cognitive Dimensions on the Consumer-SME Relationship: A Sustainability-Oriented View," Sustainability, MDPI, vol. 10(9), pages 1-19, September.
    26. Gunday, Gurhan & Ulusoy, Gunduz & Kilic, Kemal & Alpkan, Lutfihak, 2011. "Effects of innovation types on firm performance," International Journal of Production Economics, Elsevier, vol. 133(2), pages 662-676, October.
    27. Dieter Ernst & Linsu Kim, 2002. "Global Production Networks, Information Technology and Knowledge Diffusion," Industry and Innovation, Taylor & Francis Journals, vol. 9(3), pages 147-153.
    28. Ernst, Dieter & Kim, Linsu, 2002. "Global production networks, knowledge diffusion, and local capability formation," Research Policy, Elsevier, vol. 31(8-9), pages 1417-1429, December.
    29. Fredriksson, Antti & Moro, Andrea, 2014. "Bank–SMEs relationships and banks’ risk-adjusted profitability," Journal of Banking & Finance, Elsevier, vol. 41(C), pages 67-77.
    30. Maura McAdam & Rodney McAdam & Adele Dunn & Clare McCall, 2016. "Regional Horizontal Networks within the SME Agri-Food Sector: An Innovation and Social Network Perspective," Regional Studies, Taylor & Francis Journals, vol. 50(8), pages 1316-1329, August.
    31. Meghana Ayyagari & Thorsten Beck & Asli Demirguc-Kunt, 2007. "Small and Medium Enterprises Across the Globe," Small Business Economics, Springer, vol. 29(4), pages 415-434, December.
    32. Bruno Cassiman & Elena Golovko, 2011. "Innovation and internationalization through exports," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 42(1), pages 56-75, January.
    33. Ndeye Ndiaye & Lutfi Abdul Razak & Ruslan Nagayev & Adam Ng, 2018. "Demystifying small and medium enterprises’ (SMEs) performance in emerging and developing economies," Borsa Istanbul Review, Research and Business Development Department, Borsa Istanbul, vol. 18(4), pages 269-281, December.
    34. Musteen, Martina & Francis, John & Datta, Deepak K., 2010. "The influence of international networks on internationalization speed and performance: A study of Czech SMEs," Journal of World Business, Elsevier, vol. 45(3), pages 197-205, July.
    35. Ana Paula Freitas Mundim & Rossi Alessandro & Andrea Stocchetti, 2000. "SMEs in Global Market: Challenges, Opportunities and Threats," Brazilian Electronic Journal of Economics, Department of Economics, Universidade Federal de Pernambuco, vol. 3(1), June.
    36. Santos, David Ferreira Lopes & Basso, Leonardo Fernando Cruz & Kimura, Herbert & Kayo, Eduardo Kazuo, 2014. "Innovation efforts and performances of Brazilian firms," Journal of Business Research, Elsevier, vol. 67(4), pages 527-535.
    37. Bonito, Ana & Pais, Cláudio, 2018. "The macroeconomic determinants of the adoption of IFRS for SMEs," Revista de Contabilidad - Spanish Accounting Review, Elsevier, vol. 21(2), pages 116-127.
    38. Pearce, Antony & Pons, Dirk & Neitzert, Thomas, 2018. "Implementing lean—Outcomes from SME case studies," Operations Research Perspectives, Elsevier, vol. 5(C), pages 94-104.
    39. Tomlinson, Philip R. & Fai, Felicia M., 2013. "The nature of SME co-operation and innovation: A multi-scalar and multi-dimensional analysis," International Journal of Production Economics, Elsevier, vol. 141(1), pages 316-326.
    40. Ethem Duygulu & Emir Ozeren & Pınar Işıldar & Andrea Appolloni, 2016. "The Sustainable Strategy for Small and Medium Sized Enterprises: The Relationship between Mission Statements and Performance," Sustainability, MDPI, vol. 8(7), pages 1-16, July.
    41. Miller, Danny & Steier, Lloyd & Le Breton-Miller, Isabelle, 2003. "Lost in time: intergenerational succession, change, and failure in family business," Journal of Business Venturing, Elsevier, vol. 18(4), pages 513-531, July.
    42. Dominguez, Noémie & Mayrhofer, Ulrike, 2017. "Internationalization stages of traditional SMEs: Increasing, decreasing and re-increasing commitment to foreign markets," International Business Review, Elsevier, vol. 26(6), pages 1051-1063.
    43. El Kalak, Izidin & Hudson, Robert, 2016. "The effect of size on the failure probabilities of SMEs: An empirical study on the US market using discrete hazard model," International Review of Financial Analysis, Elsevier, vol. 43(C), pages 135-145.
    44. Jinjarak, Yothin & Wignaraja, Ganeshan, 2016. "An Empirical Assessment of the Export—Financial Constraint Relationship: How Different are Small and Medium Enterprises?," World Development, Elsevier, vol. 79(C), pages 152-163.
    45. Schmidt, Tobias & Sofka, Wolfgang, 2009. "Liability of foreignness as a barrier to knowledge spillovers: Lost in translation?," Journal of International Management, Elsevier, vol. 15(4), pages 460-474, December.
    46. Laforet, Sylvie, 2013. "Organizational innovation outcomes in SMEs: Effects of age, size, and sector," Journal of World Business, Elsevier, vol. 48(4), pages 490-502.
    47. Noémie Dominguez & Ulrike Mayrhofer, 2017. "Internationalization stages of traditional SMEs: Increasing, decreasing and re-increasing commitment to foreign markets," Post-Print hal-01599209, HAL.
    48. Yoke-Tong Chew & Henry Wai-Chung Yeung, 2001. "The SME Advantage: Adding Local Touch to Foreign Transnational Corporations in Singapore," Regional Studies, Taylor & Francis Journals, vol. 35(5), pages 431-448.
    49. Blomstrom, Magnus & Kokko, Ari, 1998. "Multinational Corporations and Spillovers," Journal of Economic Surveys, Wiley Blackwell, vol. 12(3), pages 247-277, July.
    50. Biggs, Tyler & Shah, Manju Kedia, 2006. "African SMES, networks, and manufacturing performance," Journal of Banking & Finance, Elsevier, vol. 30(11), pages 3043-3066, November.
    51. Reginald Masocha, 2018. "Does Environmental Sustainability Impact Innovation, Ecological and Social Measures of Firm Performance of SMEs? Evidence from South Africa," Sustainability, MDPI, vol. 10(11), pages 1-11, October.
    52. Rosenbusch, Nina & Brinckmann, Jan & Bausch, Andreas, 2011. "Is innovation always beneficial? A meta-analysis of the relationship between innovation and performance in SMEs," Journal of Business Venturing, Elsevier, vol. 26(4), pages 441-457, July.
    53. Qiao, Peng-hua & Ju, Xiao-feng & Fung, Hung-Gay, 2014. "Industry association networks, innovations, and firm performance in Chinese small and medium-sized enterprises," China Economic Review, Elsevier, vol. 29(C), pages 213-228.
    54. Doh, Soogwan & Kim, Byungkyu, 2014. "Government support for SME innovations in the regional industries: The case of government financial support program in South Korea," Research Policy, Elsevier, vol. 43(9), pages 1557-1569.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Bandara, KBTUK & Jayasundara, JMSB & Naradda Gamage, Sisira Kumara & Ekanayake, EMS & Rajapackshe, PSK & Abeyrathne, GAKNJ & Prasanna, RPIR, 2020. "Entrepreneurial Marketing & Performance of Small & Medium Enterprises in Developed and Developing Economies: A Conceptual Exploration," MPRA Paper 104341, University Library of Munich, Germany.
    2. Sisira Kumara Naradda Gamage & EMS Ekanayake & GAKNJ Abeyrathne & RPIR Prasanna & JMSB Jayasundara & PSK Rajapakshe, 2020. "A Review of Global Challenges and Survival Strategies of Small and Medium Enterprises (SMEs)," Economies, MDPI, vol. 8(4), pages 1-24, October.
    3. Amin, Hindu Jibril, 2021. "Effect of Entrepreneurial Marketing Dimensions on Small and Medium Enterprises Performance in Nasarawa State," OSF Preprints n483y, Center for Open Science.
    4. Rajapakshe, PSK & Gamage, SKN & Prasanna, RPIR & Jayasundara, JMSB & Ekanayake, EMS & Upulwehera, JMHM & Wijerathna, WAID & Abeyrathne, GAKNJ, 2020. "Social Capital, Performance of SMEs, and COVID-19 Pandemic," MPRA Paper 109530, University Library of Munich, Germany, revised 30 Aug 2020.
    5. Naz Abdulkareem Arif & Moha Asri Bin Abdullah, 2020. "Problems and Global Challenges of Small and Medium Enterprises (SMEs) in Iran," International Journal of Science and Business, IJSAB International, vol. 4(12), pages 80-92.
    6. Rajapakshe, PSK & Jayasundara, JMSB & Prasanna, RPIR & Ekanayake, EMS & Naradda Gamage, Sisira Kumara & Abeyrathne, GAKNJ & Aravinda, MAKN & Bandara, KBTUK & Senarath, BTDN, 2020. "Investigation of Institutional and Legislative Barriers and Drivers for Sustainable Transition Development of SMEs in Sri Lanka: A Literature Review," MPRA Paper 105052, University Library of Munich, Germany, revised 30 Dec 2020.
    7. Enikő Korcsmáros & Bence Csinger, 2022. "Sustainable Competitiveness in the Case of SMEs—Opportunities Provided by Social Media in an International Comparison," Sustainability, MDPI, vol. 14(19), pages 1-18, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sisira Kumara Naradda Gamage & EMS Ekanayake & GAKNJ Abeyrathne & RPIR Prasanna & JMSB Jayasundara & PSK Rajapakshe, 2020. "A Review of Global Challenges and Survival Strategies of Small and Medium Enterprises (SMEs)," Economies, MDPI, vol. 8(4), pages 1-24, October.
    2. Jayasundara, JMSB & Rajapakshe, PSK & Prasanna, RPIR & Naradda Gamage, Sisira Kumara & Ekanayake, EMS & Abeyrathne, GAKNJ, 2019. "The Nature of Sustainability Challenge in Small and Medium Enterprises and its Management," MPRA Paper 98418, University Library of Munich, Germany.
    3. Stephanie E. Mansion & Andreas Bausch, 2020. "Intangible assets and SMEs’ export behavior: a meta-analytical perspective," Small Business Economics, Springer, vol. 55(3), pages 727-760, October.
    4. Rubina Romanello & Maria Chiarvesio, 2019. "Early internationalizing firms: 2004–2018," Journal of International Entrepreneurship, Springer, vol. 17(2), pages 172-219, June.
    5. Bagheri, Mahshid & Mitchelmore, Siwan & Bamiatzi, Vassiliki & Nikolopoulos, Konstantinos, 2019. "Internationalization Orientation in SMEs: The Mediating Role of Technological Innovation," Journal of International Management, Elsevier, vol. 25(1), pages 121-139.
    6. Francisco Liñán & Justin Paul & Alain Fayolle, 2020. "SMEs and entrepreneurship in the era of globalization: advances and theoretical approaches," Small Business Economics, Springer, vol. 55(3), pages 695-703, October.
    7. Alfonso Exposito & Juan A. Sanchis-Llopis, 2020. "The effects of innovation on the decisions of exporting and/or importing in SMEs: empirical evidence in the case of Spain," Small Business Economics, Springer, vol. 55(3), pages 813-829, October.
    8. Morais, Flávio & Ferreira, João J., 2020. "SME internationalisation process: Key issues and contributions, existing gaps and the future research agenda," European Management Journal, Elsevier, vol. 38(1), pages 62-77.
    9. Simona Iammarino, 2018. "FDI and regional development policy," Journal of International Business Policy, Palgrave Macmillan, vol. 1(3), pages 157-183, December.
    10. RPIR Prasanna & JMHM Upulwehera & BDTN Senarath & GAKNJ Abeyrathne & PSK Rajapakshe & JMSB Jayasundara & EMS Ekanayake & Sisira Kumara Naradda Gamage, 2021. "Factors Determining the Competitive Strategic Positions of the SMEs in Asian Developing Nations: Case Study of SMEs in the Agricultural Sector in Sri Lanka," Economies, MDPI, vol. 9(4), pages 1-24, December.
    11. Fagerberg, Jan & Srholec, Martin & Verspagen, Bart, 2010. "Innovation and Economic Development," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 2, chapter 0, pages 833-872, Elsevier.
    12. Donbesuur, Francis & Ampong, George Oppong Appiagyei & Owusu-Yirenkyi, Diana & Chu, Irene, 2020. "Technological innovation, organizational innovation and international performance of SMEs: The moderating role of domestic institutional environment," Technological Forecasting and Social Change, Elsevier, vol. 161(C).
    13. Malesios, Chrisovalantis & De, Debashree & Moursellas, Andreas & Dey, Prasanta Kumar & Evangelinos, Konstantinos, 2021. "Sustainability performance analysis of small and medium sized enterprises: Criteria, methods and framework," Socio-Economic Planning Sciences, Elsevier, vol. 75(C).
    14. Carmen González-Velasco & Marcos González-Fernández & José-Luis Fanjul-Suárez, 2019. "Does innovative effort matter for corporate performance in Spanish companies in a context of financial crisis? A fuzzy-set QCA approach," Empirical Economics, Springer, vol. 56(5), pages 1707-1727, May.
    15. Oluseyi Moses Ajayi & Susan C. Morton, 2015. "Exploring the Enablers of Organizational and Marketing Innovations in SMEs," SAGE Open, , vol. 5(1), pages 21582440155, February.
    16. Petr Pavlínek & Pavla Žížalová, 2016. "Linkages and spillovers in global production networks: firm-level analysis of the Czech automotive industry," Journal of Economic Geography, Oxford University Press, vol. 16(2), pages 331-363.
    17. Del Giudice, M. & Scuotto, V. & Garcia-Perez, A. & Messeni Petruzzelli, A., 2019. "Shifting Wealth II in Chinese economy. The effect of the horizontal technology spillover for SMEs for international growth," Technological Forecasting and Social Change, Elsevier, vol. 145(C), pages 307-316.
    18. Beldina Owalla & Cristian Gherhes & Tim Vorley & Chay Brooks, 2022. "Mapping SME productivity research: a systematic review of empirical evidence and future research agenda," Small Business Economics, Springer, vol. 58(3), pages 1285-1307, March.
    19. Lin, Feng-Jyh & Lin, Yi-Hsin, 2016. "The effect of network relationship on the performance of SMEs," Journal of Business Research, Elsevier, vol. 69(5), pages 1780-1784.
    20. Paul, Justin, 2020. "SCOPE framework for SMEs: A new theoretical lens for success and internationalization," European Management Journal, Elsevier, vol. 38(2), pages 219-230.

    More about this item

    Keywords

    Globalization; Global Challenges; Survival Strategies; Competitiveness; Small and Medium Enterprises;
    All these keywords.

    JEL classification:

    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:98419. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.