Academic journal article Canadian Journal of Administrative Sciences

Human Capital and SME Internationalization: A Structural Equation Modeling Study

Academic journal article Canadian Journal of Administrative Sciences

Human Capital and SME Internationalization: A Structural Equation Modeling Study

Article excerpt

Abstract

This study uses a structural equation modeling technique to predict the internationalization of small and medium-sized enterprises (SMEs) from the entrepreneur's human capital (dimensions: international business skills, international orientation, environmental perception, and management know-how). While international orientation and environmental risk perception predicted internationalization, international business skills and management know-how did not. The implications of these findings for research and practice are discussed. Copyright © 2007 ASAC. Published by John Wiley & Sons, Ltd.

JEL Classification: F23, M13, O15

Keywords: human capital, internationalization, SMEs, entrepreneur, model

Résumé

Dans la présente étude, nous utilisons la modélisation par équation structurelle pour prédire l'internationalisation des petites et moyennes enterprises (PMEs) à partir des actifs humains (dimensions : les compétences en affaires internationales, l'orientation internationale, la perception de l'environnement et le savoir-faire des gestionnaires). Les résultats indiquent que si l'orientation internationale et la perception du risque environnemental prédisent l'internationalisation, il n'en va pas de même des compétences en affaires internationales et du savoir faire des gestionnaires. Nous clôturons notre étude en examinant ses implications au niveau de la recherche et de la pratique. Copyright © 2007 ASAC. Published by John Wiley & Sons, Ltd.

Mots-clés : capital humain, internationalisation, PMEs, entrepreneur, modélisation

Small business internationalization is an important element of economic development and firm growth. Internationalization is beneficial for economic growth (Jaffe & Pasternak, 1994) and for a country's well-being and international reputation (Diehl, Leibold, Koeglmayr, & Muller, 1984). Internationalization is an essential strategic choice for small firm growth (Skrt & Antoncic, 2004). Various theories have been presented to explain why firms engage in international operations and the role and influence of the entrepreneur in this process. The entrepreneur is the key variable in SMEs' internationalization as the decision-maker of the firm (Glancey, 1998; Miesenbock, 1988; Prince & Van Dijken, 1998; Reid, 1981; Westhead, Binks, Ucbasaran, & Wright, 2002).

The entrepreneur is regarded as crucial for a firm's international strategies and the central factor explaining a firm's international behaviour (Andersson, 2000). Research into the internationalization of small and medium-sized enterprises (SMEs) has emphasized the role of entrepreneur-related elements that impact export performance, such as: strategy (Baird, Lyles, & Orris, 1994; Tyebjee, 1994); attitudes (Bijmolt & Zwart, 1994; Ogbuehi & Longfellow, 1994); commitment (Dhanaraj & Beamish, 2003); perceptions (Jaffe & Pasternak, 1994); orientations (Dichtl et al., 1984); the international experience of managers (Qian, 2002; Reuber & Fischer, 1997); as well as more integrative human capital elements (Andersson, 2000; Bilkey & Tesar, 1977; Cavusgil, 1993; Herrmann & Datta, 2002; Manolova, Brush, Edelman, & Greene, 2002; McAuley, 1999; Moini, 1995; Trevino & Grosse, 2002). Our study extends this literature in analyzing several dimensions of the human capital of a firm's chief entrepreneur with respect to their relative importance and influence on an SME's internationalization.

The importance of human capital elements impacting organizational outcomes in international contexts has also been underscored for large companies, especially their top management teams (TMT) and CEOs. According to "upper echelon theory" (Hambrick & Mason, 1984), organizational outcomes, including strategic choices and performance levels, are partially predicted by managerial background characteristics. Other authors have expanded this theory to international contexts focusing on international orientation and international experience (Athanassiou & Nigh, 2002; Reuber & Fischer, 1997; Sambharya, 1996; Vida, Reardon, & Fairhurst, 2000), international assignment (Carpenter, Sanders, & Gregersen, 2000), and the heterogeneity of TMTs (education and tenure) (Carpenter, 2002; Carpenter, Geletkanycz, Sanders, 2004). …

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