The Tension between SMEs’ Growth and Sustainability in Emerging and Developed Countries’ Internationalization: Towards a Conceptual Model

Abstract

Economic growth is a priority in many developing countries in the drive to eradicate inequality and poverty, but elevated levels of economic growth are regarded as inimical to climate preservation and sustainability. The continuing depletion of natural resources and industrial pollution has led to increasing global pressure and government policies aimed at reducing climate deterioration. Advocates of ’strong sustainability’ are concentrated in the economically developed world, while developing countries have a greater need for economic growth and advocate weaker forms of sustainability where economic development, the promotion of employment and eradication of poverty take precedence over climate preservation concerns. Extant internationalization literature does not provide an integrated model of sustainable internationalization. (i.e., the relative emphasis of human and natural capital in contextual and universal factors in the internationalization process of developing and developed countries). To address this underexplored research gap, a cross-sectional, non-probabilistic convenience sample of South African SMEs using a mixed methods approach, and a secondary data eclectic analysis of developed and developing countries’ SME internationalization using a comparative multiple-case design, were adopted in this study. Findings indicate that both contextual and universal factors are prominent in developing and developed countries’ internationalization. The findings also suggest that developing countries initially focus on unsustainable contextual factors and later move on to embracing sustainable universal factors in their internationalization. This paper provides a conceptual model to describe the relative importance of contextual vis-à-vis universal factors in the sustainability of SMEs’ development as they pass through the various stages of internationalization over time.