Determination of SME’s Internationalization in Malaysian Context

Abstract

The increasingly tight competition urged SMEs to expand the market beyond national borders, not only for their growth and expansion but also to participate in the nations’ economic development. Consequently, internationalization has become a vital component for any SME which necessitate enhancing our understanding on determinants of internationalization, particularly in emerging economies. To this end, a literature review is conducted to develop a new conceptual model. Certain variables are identified for influencing SME internationalization including export capability and networking capability. Additionally, it is proposed that the relationship between networking capability, export capability and SME internationalization might be mediated by competitive advantage. This study contributes to the scant literature on the determinants of the firm competitive advantage and its potential mediating role in the relationship between organizational capabilities and SME internationalization. Practically, the present study benefits policymakers and the government in developing countries to outline the suitable policies and frameworks to produce more SMEs that are capable to exploit the international markets.