A study on the factors influencing the SMEs internationalization performance in china’s electronic industry

Abstract

The recent successes of SMEs in international market have compelled many developing countries to pay attention to finding suitable policies and programs aimed at the development and export capabilities of SMEs. To be able to provide effective policies and program, policy-makers must have a good understanding of the dynamics of SMEs and the factors that influence their decision to enter the international market (Obben & Magagula, 2003). Since China’s economic reform and opening up, the market-oriented reform of the country’s economic system has gradually engendered labor and capital markets, which have promoted an organic combination of rich labor resources and increasingly expanded capital resources. The development of SMEs, especially the sharp rise in non-state owned and non-public-owned enterprises have provided a vast space and permanent vehicle for this type of combination. Although the overall size of the stateowned economy is still increasing in terms of number of enterprises and developmental potential, non-state-owned SMEs have become the main part of the Chinese economy and played an increasingly important role in the national economy and social development. Small and Medium Enterprises (SMEs) have played an important role both in developed and developing economies. The research on internationalization has mainly focused on large companies, especially Multinational Companies (MNCs) and only limited studies have been conducted in internationalization of SMEs in developing countries. In recent years, the China government has acknowledged SMEs as a key source of domestic income growth and employment creation. While SMEs have been recognized as a source of domestic income through export activity, SMEs only play a small role compared to Large Enterprises (LEs). Policies and programs to assist SMEs to internationalize must be guided by clear understanding of the dynamic nature of SMEs. This paper proposes factors that may influence SMEs to internationalize. The sample will be drawn from owner-manager manufacturing SMEs (independent, with fewer than 1000 employees, and managed by owners) from selected provinces based on a governmental database. This paper will be used to analyze the qualitative data while statistical software will be utilized to analyze the quantitative data.