Commercial Diplomacy as a Part of National Transformation and its Impact on the Internationalization of SMEs: Evidence from Saudi Arabia

Abstract

The study assesses the impact of commercial diplomacy (CD) and its role in the national transformation and internationalization of small-to-medium-sized enterprises (SMEs). Quantitative analysis was used to interpret the data, and four models were formulated to assess the interconnectivity among the three main variables. A total of 123 Saudi SMEs were included based on pre-determined inclusion criteria. The data collected was analyzed using the Generalized Estimating Equation (GEE). The study found SMEs had an incomplete understanding of the different roles of CD. It also illustrates that integrating CD into national transformation is critical given its positive influence on the internationalization of SMEs. It also shows that such integration positively affects the SMEs penetration of foreign countries and sets the base for establishing long-term relationships in the international market. The study concludes that CD plays an essential role in stimulating the internationalization of SMEs, most notably if it is a part of a comprehensive national transformation process. It also highlights that SMEs must capitalize on the state's interest in CD to establish a cordial relationship with foreign networks to expand growth and penetration of the international market.