Does board usage of knowledge and skills affect internationalization performance of SMEs? A case of Lithuania
Abstract
Internationalization of SMEs is encouraged by the advantages of new environmental conditions and appealing business opportunities, but remains a challenging process. Top management teams and more specifically board of directors appear to be a critical determinant in addressing internationalization issues. In recent years, investigation of boards in small firms’ context has been an interest of scholars, however few investigated characteristics of human capital. This study aims to investigate whether board usage of knowledge and skills is a mediator linking characteristics of human capital of board and internationalization performance of SMEs in Lithuania. The results revealed that usage of knowledge and skills mediates the relationships between international business skills and internationalization performance. Obtained results contribute to international entrepreneurship and upper-echelons theories by highlighting the role of the board in SMEs and linking it to higher internationalization performance through their usage of knowledge and skills. This study fills the research gap and extends the extant studies in internationalization of SMEs. First, the study responds to the need to investigate how board’s capital affect internationalization. Secondly, the study responds to the need to go beyond input-output models.
First published online 14 December 2021
Keyword : internationalization, internationalization performance, board, board capital, human capital, SMEs
How to Cite
Bužavaitė, M., & Korsakienė, R. (2022). Does board usage of knowledge and skills affect internationalization performance of SMEs? A case of Lithuania. Journal of Business Economics and Management, 23(1), 145–161. https://doi.org/10.3846/jbem.2021.15921
This work is licensed under a Creative Commons Attribution 4.0 International License.
References
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Calabrò, A., & Mussolino, D. (2013). How do boards of directors contribute to family SME export intensity? The role of formal and informal governance mechanisms. Journal of Management & Governance, 17(2), 363–403. https://doi.org/10.1007/s10997-011-9180-7
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Hult, G. T. M., Ketchen, D. J., Griffith, D. A., Chabowski, B. R., Hamman, M. K., Dykes, B. J., & Cavusgil, S. T. (2008). An assessment of the measurement of performance in international business research. Journal of International Business Studies, 39(6), 1064–1080. https://doi.org/10.1057/palgrave.jibs.8400398
Hsu, C. C., Tan, K. C., Laosirihongthong, T., & Leong, G. K. (2011). Entrepreneurial SCM competence and performance of manufacturing SMEs. International Journal of Production Research, 49(22), 6629–6649. https://doi.org/10.1080/00207543.2010.537384
Karami, M., & Tang, J. (2019). Entrepreneurial orientation and SME international performance: The mediating role of networking capability and experiential learning. International Small Business Journal, 37(2), 105–124. https://doi.org/10.1177/0266242618807275
Kearney, E., Gebert, D., & Voelpel, S. C. (2009). When and how diversity benefits teams: The importance of team members’ need for cognition. Academy of Management Journal, 52(3), 581–598. https://doi.org/10.5465/AMJ.2009.41331431
Korsakienė, R., Bekešienė, S., & Hošková-Mayerová, Š. (2019a). The effects of entrepreneurs’ characteristics on internationalisation of gazelle firms: A case of Lithuania. Economic Research-Ekonomska Istrazivanja 32: 2864–2881. https://doi.org/10.1080/1331677X.2019.1655658
Korsakienė, R., Kozak, V., Bekešienė, S., & Smaliukienė, R. (2019b). Modelling internationalization of high growth firms: micro level approach. E&M Economics and Management = E&M Ekonomie a management, 22(1), 54-71. https://doi.org/10.15240/tul/001/2019-1-004
Kungwansupaphan, C., & Siengthai, S. (2014). Exploring entrepreneurs’ human capital components and effects on learning orientation in early internationalizing firms. International Entrepreneurship and Management Journal, 10, 561–587. https://doi.org/10.1007/s11365-012-0237-0
Oxelheim, L., Gregorič, A., Randøy, T., & Thomsen, S. (2013). On the internationalization of corporate boards: The case of Nordic firms. Journal of International Business Studies, 44(3), 173–194. https://doi.org/10.1057/jibs.2013.3
Podsakoff, N. P. (2003). Common method biases in behavioral research: a critical review of the literature and recommended remedies. Journal of Applied Psychology, 88(5), 879–903. https://doi.org/10.1037/0021-9010.88.5.879
Preacher, K. J., & Hayes, A. F. (2008). Contemporary approaches to assessing mediation in communication research. In A. F. Hayes, M. D. Slater, & L. B. Snyder (Eds.), The Sage sourcebook of advanced data analysis methods for communication research (pp. 13–54). Sage Publications, Inc. https://doi.org/10.4135/9781452272054.n2
Puthusserry, P., Khan, Z., Nair, S. R., & King, T. (2021). Mitigating psychic distance and enhancing internationalization of fintech SMEs from emerging markets: The role of board of directors. British Journal of Management, 32(4), 1097-1120. https://doi.org/10.1111/1467-8551.12502
Ricci, F., Scafarto, V., Moscarini, F., & Della Corte, G. (2019). The concept of board capital in corporate governance research: A structured literature review. In S. Esposito De Falco, F. Alvino, & A. Kostyuk (Eds.), New challenges in corporate governance: Theory and practice (pp. 333–348). https://doi.org/10.22495/ncpr_44
Rivas, J. L. (2012). Diversity & internationalization: The case of boards and TMT’s. International Business Review, 21(1), 1–12. https://doi.org/10.1016/j.ibusrev.2010.12.001
Roffia, P., Simón-Moya, V., & García, J. S. (2021). Board of director attributes: Effects on financial performance in SMEs. International Entrepreneurship and Management Journal. https://doi.org/10.1007/s11365-020-00715-5
Rogelberg, S. G., & Stanton, J. M. (2007). Introduction: understanding and dealing with organizational survey nonresponse. Organizational Research Methods, 10, 195–209. https://doi.org/110.1177/1094428106294693
Zattoni, A., Gnan, L., & Huse, M. (2015). Does family involvement influence firm performance? Exploring the mediating effects of board processes and tasks. Journal of Management, 41(4), 1214–1243. https://doi.org/10.1177/0149206312463936
Åberg, C., & Torchia, M. (2020). Do boards of directors foster strategic change? A dynamic managerial capabilities perspective. Journal of Management and Governance, 24, 655–684. https://doi.org/10.1007/s10997-019-09462-4
Arzubiaga, U., Kotlar, J., De Massis, A., Maseda, A., & Iturralde, T. (2018). Entrepreneurial orientation and innovation in family SMEs: Unveiling the (actual) impact of the Board of Directors. Journal of Business Venturing, 33(4), 455–469. https://doi.org/10.1016/j.jbusvent.2018.03.002
Bagheri, M., Mitchelmore, S., Bamiatzi, V., & Nikolopoulos, K. (2019). Internationalization orientation in SMEs: The mediating role of technological innovation. Journal of International Management, 25(1), 121–139. https://doi.org/10.1016/j.intman.2018.08.002
Barroso, C., Villegas, M. M., & Pérez-calero, L. (2011). Board influence on a firm’s internationalization. Corporate Governance: An International Review, 19(4), 351–367. https://doi.org/10.1111/j.1467-8683.2011.00859.x
Barroso-Castro, C., Domínguez-CC, M., & Rodríguez-Serrano, M. A. (2020). SME growth speed: The relationship with board capital, Journal of Small Business Management. https://doi.org/10.1080/00472778.2020.1717293
Bamiatzi, V. C., & Kirchmaier, T. (2014). Strategies for superior performance under adverse conditions: A focus on small and medium-sized high-growth firms. International Small Business Journal, 32(3), 259–284. https://doi.org/10.1177/0266242612459534
Baum, M., Schwens, C., & Kabst, R. (2013). International as opposed to domestic new venturing: The moderating role of perceived barriers to internationalization. International Small Business Journal: Researching Entrepreneurship, 31, 536–562. https://doi.org/10.1177/0266242611428343
Bjørnåli, E. S., & Aspelund, A. (2012). The role of the entrepreneurial team and the board of directors in the internationalization of academic spin-offs. Journal of International Entrepreneurship, 10(4), 350–377. https://doi.org/10.1007/s10843-012-0094-5
Bjørnåli, E. S., Knockaert, M., & Erikson, T. (2016). The impact of top management team characteristics and board service involvement on team effectiveness in high-tech start-ups. Long Range Planning, 49(4), 447–463. https://doi.org/10.1016/j.lrp.2015.12.014
Bužavaitė, M. & Korsakienė, R. (2019). Human capital and the internationalisation of SMEs: A systemic literature review. Entrepreneurial Business and Economics Review, 7(3), 125–142. https://doi.org/10.15678/EBER.2019.070307
Calabrò, A., & Mussolino, D. (2013). How do boards of directors contribute to family SME export intensity? The role of formal and informal governance mechanisms. Journal of Management & Governance, 17(2), 363–403. https://doi.org/10.1007/s10997-011-9180-7
Chen, H. L., Chang, C. Y., & Hsu, W. T. (2017). Does board co-working experience influence directors’ decisions toward internationalization? Management International Review, 57(1), 65–92. https://doi.org/10.1007/s11575-016-0309-4
Chen, H. L., Hsu, W. T., & Chang, C. Y. (2016). Independent directors’ human and social capital, firm internationalization and performance implications: An integrated agency-resource dependence view. International Business Review, 25(4), 859–871. https://doi.org/10.1016/j.ibusrev.2015.10.010
European Commission. (2019). SBA Fact Sheet Lithuania. Retrieved from https://eimin.lrv.lt/uploads/eimin/documents/files/Lithuania%20-%20SBA%20Fact%20Sheet%202019.pdf
Gerschewski, S., Rose, E. L., & Lindsay, V. J.. (2015). Understanding the drivers of international performance for born global firms: An integrated perspective. Journal of World Business, 50(3), 558–575. https://doi.org/10.1016/j.jwb.2014.09.001
Hayes, A. F., Montoya, A. K., & Rockwood, N. J. (2017). The analysis of mechanisms and their contingencies: PROCESS versus structural equation modeling. Australasian Marketing Journal (AMJ), 25(1), 76–81. https://doi.org/10.1016/j.ausmj.2017.02.001
Hult, G. T. M., Ketchen, D. J., Griffith, D. A., Chabowski, B. R., Hamman, M. K., Dykes, B. J., & Cavusgil, S. T. (2008). An assessment of the measurement of performance in international business research. Journal of International Business Studies, 39(6), 1064–1080. https://doi.org/10.1057/palgrave.jibs.8400398
Hsu, C. C., Tan, K. C., Laosirihongthong, T., & Leong, G. K. (2011). Entrepreneurial SCM competence and performance of manufacturing SMEs. International Journal of Production Research, 49(22), 6629–6649. https://doi.org/10.1080/00207543.2010.537384
Karami, M., & Tang, J. (2019). Entrepreneurial orientation and SME international performance: The mediating role of networking capability and experiential learning. International Small Business Journal, 37(2), 105–124. https://doi.org/10.1177/0266242618807275
Kearney, E., Gebert, D., & Voelpel, S. C. (2009). When and how diversity benefits teams: The importance of team members’ need for cognition. Academy of Management Journal, 52(3), 581–598. https://doi.org/10.5465/AMJ.2009.41331431
Korsakienė, R., Bekešienė, S., & Hošková-Mayerová, Š. (2019a). The effects of entrepreneurs’ characteristics on internationalisation of gazelle firms: A case of Lithuania. Economic Research-Ekonomska Istrazivanja 32: 2864–2881. https://doi.org/10.1080/1331677X.2019.1655658
Korsakienė, R., Kozak, V., Bekešienė, S., & Smaliukienė, R. (2019b). Modelling internationalization of high growth firms: micro level approach. E&M Economics and Management = E&M Ekonomie a management, 22(1), 54-71. https://doi.org/10.15240/tul/001/2019-1-004
Kungwansupaphan, C., & Siengthai, S. (2014). Exploring entrepreneurs’ human capital components and effects on learning orientation in early internationalizing firms. International Entrepreneurship and Management Journal, 10, 561–587. https://doi.org/10.1007/s11365-012-0237-0
Oxelheim, L., Gregorič, A., Randøy, T., & Thomsen, S. (2013). On the internationalization of corporate boards: The case of Nordic firms. Journal of International Business Studies, 44(3), 173–194. https://doi.org/10.1057/jibs.2013.3
Podsakoff, N. P. (2003). Common method biases in behavioral research: a critical review of the literature and recommended remedies. Journal of Applied Psychology, 88(5), 879–903. https://doi.org/10.1037/0021-9010.88.5.879
Preacher, K. J., & Hayes, A. F. (2008). Contemporary approaches to assessing mediation in communication research. In A. F. Hayes, M. D. Slater, & L. B. Snyder (Eds.), The Sage sourcebook of advanced data analysis methods for communication research (pp. 13–54). Sage Publications, Inc. https://doi.org/10.4135/9781452272054.n2
Puthusserry, P., Khan, Z., Nair, S. R., & King, T. (2021). Mitigating psychic distance and enhancing internationalization of fintech SMEs from emerging markets: The role of board of directors. British Journal of Management, 32(4), 1097-1120. https://doi.org/10.1111/1467-8551.12502
Ricci, F., Scafarto, V., Moscarini, F., & Della Corte, G. (2019). The concept of board capital in corporate governance research: A structured literature review. In S. Esposito De Falco, F. Alvino, & A. Kostyuk (Eds.), New challenges in corporate governance: Theory and practice (pp. 333–348). https://doi.org/10.22495/ncpr_44
Rivas, J. L. (2012). Diversity & internationalization: The case of boards and TMT’s. International Business Review, 21(1), 1–12. https://doi.org/10.1016/j.ibusrev.2010.12.001
Roffia, P., Simón-Moya, V., & García, J. S. (2021). Board of director attributes: Effects on financial performance in SMEs. International Entrepreneurship and Management Journal. https://doi.org/10.1007/s11365-020-00715-5
Rogelberg, S. G., & Stanton, J. M. (2007). Introduction: understanding and dealing with organizational survey nonresponse. Organizational Research Methods, 10, 195–209. https://doi.org/110.1177/1094428106294693
Zattoni, A., Gnan, L., & Huse, M. (2015). Does family involvement influence firm performance? Exploring the mediating effects of board processes and tasks. Journal of Management, 41(4), 1214–1243. https://doi.org/10.1177/0149206312463936