Internationalization, digitalization, and sustainability: Are SMEs ready? A survey on synergies and substituting effects among growth paths

Abstract

• Artificial Intelligence (AI) readiness is associated with export intensity in SMEs. • AI and environmental sustainability are competing paths for international SMEs. • SMEs struggle to pursue more than one growth path at the same time. • AI readiness has a stronger impact when export intensity is low or null. • Sustainability readiness has a stronger impact when export intensity is medium/high. Internationalization, digitalization, and sustainability are three key growth paths for firms. In particular, the contemporary economy stresses the relevance of digital transformation as a central driver towards innovation and business renewal, especially for established small and medium sized enterprises (SMEs). However, little is known about the relationships among the above-mentioned growth paths, whether they are competing or complementary options. Our contribution addresses this gap focusing on two forms of organizational readiness within SMEs. First, it investigates the impact of Artificial Intelligence readiness on international performance. Second, it explores whether the relationship between digitalization and internationalization is affected by sustainability readiness. The empirical survey relies on a sample consisting of 438 SMEs, including both domestic and international companies. Findings confirm, as expected, that Artificial Intelligence readiness positively influences the international performance of SMEs. Moreover, we find that digitalization and sustainability are positively related, but they turn to be competing growth paths when the firm internationalizes..