Application of knowledge gained from internationalisation using country of origin absorptive capacity among emerging market SMEs

Abstract

The internationalisation of emerging market small, medium enterprises (“SMEs “) by access to global networks and institutional changes has allowed them to compete with large multinational enterprises (“MNEs”). Historically, focus has concentrated on studies predominantly of developed economy MNEs who expanded from emerging markets and with transfer of knowledge from head office to subsidiaries. This culminated in a lack of focus on the internationalisation on emerging market SMEs and on the reverse knowledge transfer from subsidiary to parent company of these firms. SMEs make up the majority of businesses globally and employ more people than MNEs thus justifying the need for further research. A qualitative study was conducted following an interpretive and inductive research approach to gather participant insights and to develop a greater understanding by exploring how and what knowledge SMEs gain from internationalisation into other emerging markets. This provided an analytical lens to explore how it was adopted and exploited back in their country of origin for commercial or sustainable benefits. Data analysis was conducted from the transcripts to develop codes which were then divided into categories and key themes aligned to the research questions. The findings were then compared and contrasted against available academic literature, which evolved into the development of a conceptual model of the key constructs.