Understanding the Effect of Home Country Institutional Pressures towards Internationalization Strategies among Malaysian SMEs

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Noor Azura Azman, Osman Mohamad, and Noor Hazlina Ahmad

ABSTRACT

A challenging business environment nowadays made small business especially SMEs think twice before planning to initiate international business. With lacking of knowledge and experience in handling international market activities, makes most SMEs faced difficulties starts from home country obstacles as well as host country. This study tends to understand the consequences of home country institutional pressure on internationalization strategy. In this research, purposive sampling was used in selecting 860 SMEs as the sample from the registered list of companies in the Federation of Manufacturing Companies (FMM) directory, which is the most comprehensive list of SMEs database. The Partial Least Square (PLS-SEM) was used as the statistical tool to measure the significance relationship between construct. The major findings were proven the significance of the relationship and confirmed the importance of understanding the home country institutional pressures and internationalization strategy choices. 

 

Keywords: Home country institutional pressures;Internationalization strategies; SMEs