Unlocking international SME success: the crucial role of dynamic managerial capabilities in driving international entrepreneurial orientation

Abstract

The study aims to examine the relationship between international entrepreneurial orientation (IEO) and international performance (IP) of internationalized small and medium-sized enterprises (SMEs) in the Slovak Republic. Given the scarcity of empirical research on the managerial dimensions influencing this relationship, the study also aims to investigate the moderating effect of dynamic managerial capabilities (DMCs) as a higher-order variable and its components in the IEO-IP nexus. The theoretical framework is grounded in the resource-based view and capability-based view, which posit that firm-specific resources and capabilities are critical sources of competitive advantage. Data were collected via a questionnaire survey administered to 145 internationalized SMEs in the service and industrial sectors. The analysis used a robust statistical method, structural equation modelling through partial least squares, which is suitable for modeling complex relationships and managing smaller sample sizes. The results reveal that IEO is directly associated with the IP of SMEs. Moreover, DMCs, as a multidimensional construct, exert a statistically significant moderating effect on the IEO-IP relationship. Regarding the specific components of DMCs, social capital and managerial cognition significantly reinforce the connection between IEO and international performance, while human capital does not exhibit a significant effect. The study’s theoretical contribution lies in validating the role of DMCs as a complex construct in augmenting international performance in conjunction with IEO. It also identifies the differential effects of the three DMCs components in the IEO-IP framework, offering nuanced insights into their moderating roles. The research underscores the importance of strategic business orientation and DMCs for SMEs operating in the global market. Finally, managerial implications and directions for future research are proposed.