Export Performance of Indian SMEs in Textile Sector: Role of Knowledge Based Resources

Abstract

In the highly globalized world, SMEs too are actively participating in international business, expanding their sales of goods and services across borders, to different geographical markets. Process of internationalization requires commitment of additional resource. The resource based theory says that for sustained competitive advantage resources should be valuable, rare, inimitable, and non-substitutable. Resources are scarce. Resources and capabilities can be divided into various categories. This study examines the role of knowledge based resources (technological resources and marketing resources) on export performance of SMEs in the Indian textile sector. Data has been taken from the Prowess data base of Center of Monitoring Indian Economy (CMIE). The results show that marketing resources support export performance. The data also highlights the fact that Indian SMEs are making little investment in R&D. Two highly debated areas, size and age have been taken as control variables. Both these variables support the theory of rapid internationalization and that size does not matter, in today's world. This study not only advances the role of resources in internationalization process of SMEs but also provided implications for policy makers and managers. Research on Indian SMEs is limited. Similar future research on SMES may help in developing a parsimonious model.