Abstract

Despite internationalization theory’s recognition that place and policy constitute fundamental barriers for the internationalization of SMEs, research into rural-based firms from the developing world is a much underdeveloped and neglected area. To address the need to examine this gap, the purpose of this study is to identify and compare place and policy challenges of rural SMEs’ internationalization in Nigeria. We have developed a model that extends internationalization theory’s overemphasis on the structural aspects of these barriers and thereby provide a resolution tool for managers. By using PLS path modelling methodology, we also administered 403 questionnaires in six of Nigeria’s geopolitical zones. Our three-stage analyses reveal findings that the physical and geographical (or place barrier) challenges account for 90% whilst the traditionally neglected aspects of legal and regulatory barriers score 85%. Therefore, place related barriers should be given slightly higher priority if it is not possible to be given equal recognition in internationalization theory. These findings provide new insights into a more complex picture of SMEs’ internationalization in emerging economies. It is recommended that our Human-centric Hierarchical Model could help inform managers’ decision-making processes on what human aspects they need to prioritize when faced with policy and place barriers. It is also recommended that our model adds social value to SME businesses and provides a new lens for scholars to investigate place and policy related barriers to rural Nigeria’s SMEs.