Connecting the Dots: Exploring the Knowledge-based Antecedents of SMEs’ Profitability and Development via International Ventures

Abstract

As shifts occur on the global market and business models adapt to a dynamic environment, the process of business internationalization, as performed by small and medium-sized enterprises (SMEs), maintains its relevance for academics, professionals, international organizations, and authorities. Studies in the field have emphasized the strategic component of internationalization, linking it to cultivating (sustainable) competitive advantages, to stimulating strategic innovation, to the pursuit of profitability, and to an overall improved performance, taking into account the activities conducted on foreign markets. Based on a survey carried out with over 100 European SMEs in the steel field, this study examines the influences of strategic collaborators (from international business networks), intermediaries (as organizational links to the target stakeholders), and strategic innovation on SMEs’ profitability resulted from international operations, and on the level of business development on foreign markets. The results have shown positive influences among most of the considered factors (i.e., direct collaborators, strategic innovation, international profitability and development), whereas intermediaries have a significant influence only on international profitability and not on SMEs’ development on foreign markets.