The internationalization and competitiveness of SMEs: A study of Malaysian firms investing in Cambodia / Ng Yin Kuan

Ng , Yin Kuan (2021) The internationalization and competitiveness of SMEs: A study of Malaysian firms investing in Cambodia / Ng Yin Kuan. PhD thesis, Universiti Malaya.

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Abstract

The purpose of the study is to explore the reasons that have led Malaysian firms to internationalize, and to determine the factors contributing to their competitive advantage. The study adopted a mixed research mode; the qualitative approach was adopted in the first phase of this study that concerns on the motivational factors that lead to internationalization (Research Question 1), and the quantitative approach was utilized in the second phase that concerns on the perceived factors contributing to Malaysian SME’s sustainable competitive advantage in Cambodia (Research Questions 2 and 3). The targeted respondents for the qualitative analysis were small and medium sized Malaysian firms operating in Cambodia which were selected by using purposive sampling. In-depth interview was utilized in the study to understand what, why and how firms go abroad. Cross-case analysis reveals these firms are driven by host country-based advantage; driven by home government; driven by home country limitations; driven by self-inflicted actions and driven by social influence. The present study finds out that the factors that motivate firms to internationalize are different from accounts found in the extant literature. For the quantitative analysis, a sample of 103 small and medium sized firms was selected by using a purposive and snowball sampling. Structural Equation Modelling technique to test the conceptual framework by adopting Partial Least Square approach. The present study examines whether social network mediated the relationship between entrepreneurial orientation and sustainable competitive advantage, and whether the mediation is moderated by a competitive business environment by adopting Hayes’ moderated mediation approach. The mediation analysis reveals that social network mediates the association between entrepreneurial orientation and sustainable competitive advantage of firms. This study reveals that entrepreneurial orientation is not able to influence firm performance and is expected to only function well in a given context as entrepreneurship capabilities is not the only source for sustainable competitive advantage of the SMEs. Without the functional social networks, entrepreneurs may fail to acquire/learn the necessary information to make them unique. The moderation effects indicate that the mediation path is partially supported. The findings imply that the founders are more concerned with leveraging on the resources they have to compete in the marketplace and achieve success in the highly dynamic and hostile business environment rather than building on their social connections. Given the significance of the findings, similar studies focusing on other regions should be carried out to strengthen the alternative explanations that this study offers to understand the internationalization of business, especially among small and medium enterprises. A profound understanding of such internationalization factors can assist home and host governments to support better the relocation of small and medium enterprises abroad.

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