The Role of Responsible Business Practices in International Business Relationships Between SMEs from Developed and Emerging Economies

Abstract

The different institutional environments of developed and emerging economies may dictate the business practices of small- and medium-sized enterprises (SMEs). With national institutions’ current focus on better integrating SMEs into both international trade and sustainability goals, it is worth investigating the role socially and environmentally responsible business practices (RBPs) plays in SMEs’ international business relationships. The qualitative approach employed in this study reveals that environmental responsibility is not prominent in cross-border business relationships between Finnish and Russian SMEs, while social responsibility in part of ethics, transparency and partner responsibility is crucial for these relationships. The study thus contributes to the literature on responsibility in international business (IB) and international entrepreneurship (IE) by (1) suggesting that international business relationships can help raise the ethical behaviour of SMEs from emerging economies; (2) extending the research on sustainability-related issues in IB/IE towards emerging economies and the SME context; and (3) applying the institutional lens to explain RBP in international business relationships.