Impediments for SME Internationalization in Developing Countries Introduction

Small and medium enterprises (SMEs) in Asian countries have played a key role in the economic development of the developing countries in Asia (Paul & Gupta, 2014; Venkatesh, Dubey, & Bhattacharya, 2015). In developing and emerging economies SMEs are responsible for job creation and are also a key for economic development (Genc, Dayan, & Genc, 2019). Though SMEs are key drivers for economic development in terms of the employment and production of raw materials and semi-finished goods the generation of value-added products/services for end-user consumption and exports are relatively at lower levels which can be attributed to the lack of innovation in small and medium enterprises (Genc et al., 2019). To this effect, enhancing the competitiveness of SMEs in emerging markets is crucial for the economic growth of those markets. Internationalization helps SMEs to disperse business risk across different markets. Secondly, it generates more revenue to invest in technology and production, which are key to SMEs’ growth. Thirdly, by cooperating with foreign enterprises, SMEs can gain access to more advanced technology and improve innovative capacity. And fourth, internationalization allows SMEs access to foreign markets, which assists to improve operational efficiency and tap production potential. Despite their contribution towards the national economy, SMEs in developing countries face several hurdles while internationalizing. Such problems are unique and different from those SMEs from developed countries. Lack of resources and capabilities, the liability of smallness, marketing barriers, export-procedure barriers, internal organization and external operating environmental barriers, managerial incompetence, institutional barriers, human resource barriers, poor economic conditions, industry entry and exit barriers, knowledge gaps of external markets, currency fluctuations and country-level antecedents are some common barriers, which larger MNCs can overcome much better than smaller firms (Chandra, Paul, & Chavan, 2020)