Abstract
Despite the importance of Small and Medium Enterprises (SMEs) and its role as a key participant in international business, empirical research on Malaysian SMEs in the area of internationalization has been limited. In an attempt to investigate the relationship of internationalization and performance of SMEs, this study focuses on SMEs in the Malaysian manufacturing sector. The conceptual framework is developed based on previous literature gaps on SME internationalization and firm performance. A sample of 77 SMEs in the manufacturing sector has participated in this research. Using a structured questionnaire, the data was collected through the post from SMEs located in the northern region of Peninsular Malaysia. The study showed a significant relationship between internationalization and performance. This result poses some implications to managers and policy makers.
Highlights
In most recent studies in China and Japan by Yang, Jiang, Kang and Ke (2009), internationalization has brought success to Haier and Matsushita
In an attempt to investigate the relationship of internationalization and performance of Small and Medium Enterprises (SMEs), this study focuses on SMEs in the Malaysian manufacturing sector
It shows that 44.2 percent of SMEs enjoy 11 percent - 20 percent sales from such sources, whereas 26.0 percent of them receive more than 70 percent of sales
Summary
In most recent studies in China and Japan by Yang, Jiang, Kang and Ke (2009), internationalization has brought success to Haier and Matsushita. In line with strategies formulated in the Ninth Malaysian Plan and the Third Industrial Master Plan (IMP3), the main focus for 2008 was to promote SMEs in the services, primary agriculture and agro-based sectors (Ninth Malaysia Plan, 2006). These statistics indicates that the SMEs contribute significantly to the Malaysian economy as well as increasing roles in international trade. Among the earliest motivations that drove companies to invest abroad was the need to secure key supplies, especially minerals, energy, and scarce raw material resources Another strong trigger of internationalization could be described as the market seeking behavior. The availability of lower-cost capital became a strong force for internationalization
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