Paper info

Understanding SME entry into emerging markets using institutional and resource-based theory

Michel Rod , Val Lindsay and Nick Ashill

The paper was published at the 33rd IMP-conference in Kuala Lumpur, Malaysia in 2017.

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Entry strategies of foreign firms into India and China are rapidly growing topics in the marketing and international business literatures. Most research on foreign firms doing business in emerging markets concludes that firms find these markets to be quite different to those in the developed Western world. The choice of market entry strategy, market segmentation and the role of intermediaries reflect some of the challenges that firms face in entering and doing business in emerging markets. However, how firms succeed in these markets has largely gone unexamined in the academic literature. In this study we explore the drivers for successful market entry and development by small and medium-sized enterprises (SMEs) into one large emerging market – India, and make several contributions. Given that many developed economies rely largely on SME activity for their GDP growth as well as to the internationalisation of their products and services, focusing on the internationalisation of this subgroup of firms is critical. By incorporating a range of country level variables we consider the role of institutional actors (both host and home country) on SME entry and development. We then broaden our investigation to include post-entry factors that influence the longer-term involvement of SMEs in India. Finally, we offer a theoretical context for SME internationalisation into emerging markets.