Abstract

In today’s global marketplace, Small and Medium Sized Enterprises (SMEs) are increasingly looking at internationalisation strategies to boost growth, profitability and competitiveness. However, challenges, such as, socio cultural differences, political institutions, limited resources, competitive challenges, market threats, economic and technological barriers all hinder SMEs from entering and competing favourably in the international markets. Considering the important link between lack of resources and internationalisation of SMEs, this study examined economic and technology related barriers of SMEs internationalisation from a neglected yet emerging market context in Bangladesh.
To compare the relative importance of these two particular categories of barriers, this study developed and validated a Partial Least Square based Structural Equation Model (PLS-SEM) with primary data gathered from questionnaires from 212 Bangladeshi SMEs. The findings of the paper suggest that, technology related barriers seem slightly more influential than economic barriers. As the difference is very low, importance should be given to both types of barriers as found.
Conceptually, this study extends this area of research by re framing economic and technology related barriers of internationalisation as a hierarchical reflective model within an emerging economy context. Empirically, it confirms that PLS-SEM can be used to compare the relative importance of these two types of barriers. Practically, policy makers can give slightly more priorities on the technology related barriers where it is not possible to give equal importance to both because of limited resource and research neglect on developing economies.