Organizational capabilities and SME exports: the moderating role of external funding intentions and managerial capacity

Abstract

Entry to export markets can stimulate business growth, yet remarkably few small- and medium-sized enterprises (SMEs) pursue export strategies. Using data gathered from the UK Small Business Surveys and a theoretical framework that combines principles from the resource-based view of the firm with notions of “investment readiness” and “managerial capacity,” we examine the empirical relationships between new product development (NPD) and new market entry (NME) capabilities on UK SMEs export decisions. Among other things, we find that there are contexts in which SMEs should develop these capabilities concurrently and others in which they should develop them independently to minimize added managerial complexity. Our results also indicate that in the absence of strong managerial capacity, SMEs should prioritize NME over NPD capabilities. Our findings produce several interesting theoretical and practical implications for SME exports.