Do Social Network Relationships and Overseas Market Orientation Affect SMEs’ International Performance? A Dynamic Internationalization Capability Perspective

Abstract

Dynamic internationalization capability plays a significant role in the performance of Taiwanese small and medium-sized enterprises (SMEs) in the process of internationalization. According to the concept of dynamic capability, businesses need to develop and maintain capabilities by obtaining valuable knowledge from different sources, such as market environments and social networks. However, previous studies have tended to only discuss the development of dynamic internationalization capabilities from a single perspective and have failed to explore more comprehensive knowledge sources. This study investigates whether social network relationships and overseas market orientation (OMO) improve dynamic internationalization capabilities. Participants were collected from internationalized SMEs in Taiwan via purposive sampling, yielding 211 valid samples. Results show that trust and commitment have a positive impact on international exploration capabilities, OMO has a positive impact on both international exploration and international exploitation capabilities, and international exploration has a positive impact on international performance. According to the findings, this study has several managerial and theoretical implications. In addition, it shows that the classification of SMEs’ capabilities enables them to focus on resources, thus contributing to resource concentration and the reduction of unnecessary waste.