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INTERNATIONALIZATION AS A "WORK-AROUND" STRATEGY: HOW GOING ABROAD CAN HELP SMES OVERCOME LOCAL CONSTRAINTS

Department of Accounting and Finance, College of Business Studies, Sudan University of Science and Technology, P. O. Box 407 Khartoum, Sudan

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ELCO VAN BURG

Department of Management and Organization, Faculty of Economics and Business Administration, VU University Amsterdam, De Boelelaan 1105, 1081 HV Amsterdam, the Netherlands

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RICARDO M. PETERS

School of Business and Finance, Faculty of Economic and Management Sciences, University of the Western Cape, Private Bag X17 Bellville, South Africa

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, and

KOBUS VISSER

Faculty of Economic and Management Sciences, University of the Western Cape, Private Bag X17 Bellville, South Africa

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https://doi.org/10.1142/S1084946715500119Cited by:9 (Source: Crossref)

Abstract

The economic environment and associated constraints have significant and unequal effects on Small and medium enterprises (SMEs). Constraints have been used, among other growth factors, to understand why some SMEs fail to grow while others foster. However, beyond knowing the effects or constraints, it is important entrepreneurs know how they can avoid constraints. The study provides an important contribution by showing that South-African SMEs that face constraints because of competition, government rules and regulations, financing gaps and corruption, can navigate away from these constraints by going international. The evidence shows a positive moderating effect of internationalization on the relationship between local constraints and SME growth. However, the results also reveal that lack of government support is a significant constraint to growth when SMEs export internationally.

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