Internationalisation of South African SMMEs: the role of capital factors.

Date
2013-02-18
Authors
Shree, Sanam.
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Abstract
The purpose of this paper is to investigate the influence of capital factors on the internationalisation of South African Small Medium and Micro-Enterprises (SMMEs). These capital factors are Financial, Social and Human capital. The study concentrates on determining how various levels of capital act as a preventative factor when a firm internationalises. The low levels of Financial capital is accentuated as it prohibits South African SMMEs from internationalising. Social capital emphasises that few social ties and networks prevent South African SMMEs from globalising. Lastly, the focal point of Human capital are the low levels of international knowledge and experience of management, which prohibits South African SMMEs from expanding internationally. To address these issues, this study draws upon a sample of 136 South African internationalised and non-internationalised SMMEs studied via an online questionnaire. The major theories underlying this research include the Resource-based theory, the Social Network theory and the Organisational Learning theory. Multivariate statistical analysis were used to test the results and confirmed that Financial Funding had an influence on an organisation’s ability to internationalise. Results from this study can potentially provide policy-makers and practitioners with additional insights into the key constraints to internationalisation of South African SMMEs.
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Keywords
Small business, International business enterprises, Capital, Financial capital
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