DOES BOARD USAGE OF KNOWLEDGE AND SKILLS AFFECT INTERNATIONALIZATION PERFORMANCE OF SMES? A CASE OF LITHUANIA

Monika Bužavaitė,Renata Korsakienė

doi:10.3846/jbem.2021.15921

Abstract

Internationalization of SMEs is encouraged by the advantages of new environmental conditions and appealing business opportunities, but remains a challenging process. Top management teams and more specifically board of directors appear to be a critical determinant in addressing internationalization issues. In recent years, investigation of boards in small firms’ context has been an interest of scholars, however few investigated characteristics of human capital. This study aims to investigate whether board usage of knowledge and skills is a mediator linking characteristics of human capital of board and internationalization performance of SMEs in Lithuania. The results revealed that usage of knowledge and skills mediates the relationships between international business skills and internationalization performance. Obtained results contribute to international entrepreneurship and upper-echelons theories by highlighting the role of the board in SMEs and linking it to higher internationalization performance through their usage of knowledge and skills. This study fills the research gap and extends the extant studies in internationalization of SMEs. First, the study responds to the need to investigate how board’s capital affect internationalization. Secondly, the study responds to the need to go beyond input-output models.

Highlights

Small and medium sized enterprises (SMEs) are perceived as the significant contributors of national economies due to high input in the new jobs’ creation and value added
Taking into consideration the positive associations of board and different outcomes of organization (Ricci et al, 2019), we argue that characteristics of board capital, shaped by international business skills, managerial competence and risk-taking characteristics of its members, positively influence internationalization performance
The findings complement resource dependency theory by justifying the importance of the board and their rich human capital characteristics in the resource attainment of the firm, which is closely related to internationalization performance

Summary

Introduction

Small and medium sized enterprises (SMEs) are perceived as the significant contributors of national economies due to high input in the new jobs’ creation and value added. Internationalization as an incremental involvement in international markets helps to increase the profit of SMEs and support the local economies by the higher amount in taxes. Internationalization strategies appear to be critical for SMEs due to globalization processes and increased competition in local markets (Chen et al, 2017). Org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited. Does board usage of knowledge and skills affect internationalization

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Conclusion