Post-entry internationalization speed of SMEs: The role of relational mechanisms and foreign market knowledge

• Published in: International business review 2021-02, Vol.30 (1), p.101761, Article 101761
• Main Authors: Zahoor, Nadia, Al-Tabbaa, Omar
• Format: Article
• Language: English
• Subjects: Domestic environmental hostility; Foreign market knowledge; Post-entry internationalization speed; Relational mechanisms; SMEs
• ISSN: 0969-5931; 1873-6149
• DOI: 10.1016/j.ibusrev.2020.101761

•Mutual trust, relational embeddedness, and relational commitment are important relational mechanisms·•All the three relational mechanisms positively influence SMEs’ foreign market knowledge acquisition in domestic networks·•Foreign market knowledge acquired from domestic networks is positively related to SMEs’ post-entry internationalization speed.•Further, this relationship is moderated by domestic environmental hostility.•The study contributes to the international business and SMEs literature. Prior research shows that small and medium-sized enterprises (SMEs) can utilize domestic networks with internationally experienced partners to accelerate their internationalization process. Yet, there is a lack of clarity and limited empirical evidence regarding the role of relational mechanisms within these networks in driving post-entry internationalization speed (PIS) of SMEs. To address this gap, this study examines the relational mechanisms-PIS relationship by drawing insights from the relational view to argue that foreign market knowledge mediates the relationship between relational mechanisms and PIS. The hypothesized study model is tested using a structural equation modelling (SEM) technique on a sample of 394 UK based manufacturing SMEs. Our results show that foreign market knowledge acquisition from domestic networks fully mediates the relationship between relational mechanisms and PIS. Additionally, the linkage between foreign market knowledge acquisition and PIS is moderated by domestic environmental hostility, such that the relationship is strengthened when domestic environmental hostility increases. We discuss the contributions and implications of our results and suggest opportunities for future research.