Social Capital Dynamic in SME’ Exploration of International Opportunities

Abstract

This paper aims to contribute to the literature on network and international business (IB) by investigating the role of social capital in the exploration of international opportunities and international performance. Research on internationalisation has shown strong evidence for the positive impact of social capital on identifying opportunities and enhancing international performance of small and medium enterprises (SMEs). However, there is ambiguity in the process underlying the transformation of social capital into successful internationalisation. This paper examines the dynamic of social capital to capture its role in recognising of opportunities in foreign markets, using a survey of 157 British SMEs exporting to ASEAN. We argue that social capital can be considered as a useful resource which leads to capabilities development for small firms’ international expansion. We also differentiate the potential resources embedded in social capital at both individual and organisation level.