Social capital, knowledge and internationalisation, a study of Indian software SMEs

This study examines the role of social capital and knowledge in the internationalisation of small- and medium-sized enterprises (SMEs). In particular, it is concerned with uncovering the differential effects of social capital types on SMEs' intemational growth and mode choice. Using a mixed methodology that combines case studies with a survey of knowledge intensive SMEs in a developing economy context viz., Indian software SMEs, the study found that knowledge - both market knowledge and knowledge intensity - is a vital driver of international growth. Social capital, particularly bridging social capital, could facilitate early-stage intemational growth but could, over time, get "exhausted". Thus knowledge may be a more enduring source of international growth. As for mode choice, this study seeks to contribute to extant understanding of SMEs' modal commitment, by invoking the emerging concept of the micromultinational, which is an SME that goes beyond mere exporting to establish a presence in international market(s). Modal commitment (i. e., the propensity for an SME to become a micromultinational) seemed to be significantly associated with social capital - specifically bonding social capital - rather than knowledge. Thus a contribution of the study pertains to the relative role of social capital and knowledge in SME internationalisation. It was also seen, particularly from the case studies, that social capital may facilitate the creation and acquisition of knowledge, and therefore intemationalising SMEs may do well to direct their efforts to knowledge-enhancement within networks.This study examines the role of social capital and knowledge in the internationalisation of small- and medium-sized enterprises (SMEs). In particular, it is concerned with uncovering the differential effects of social capital types on SMEs' intemational growth and mode choice. Using a mixed methodology that combines case studies with a survey of knowledge intensive SMEs in a developing economy context viz., Indian software SMEs, the study found that knowledge - both market knowledge and knowledge intensity - is a vital driver of international growth. Social capital, particularly bridging social capital, could facilitate early-stage intemational growth but could, over time, get "exhausted". Thus knowledge may be a more enduring source of international growth. As for mode choice, this study seeks to contribute to extant understanding of SMEs' modal commitment, by invoking the emerging concept of the micromultinational, which is an SME that goes beyond mere exporting to establish a presence in international market(s). Modal commitment (i. e., the propensity for an SME to become a micromultinational) seemed to be significantly associated with social capital - specifically bonding social capital - rather than knowledge. Thus a contribution of the study pertains to the relative role of social capital and knowledge in SME internationalisation. It was also seen, particularly from the case studies, that social capital may facilitate the creation and acquisition of knowledge, and therefore intemationalising SMEs may do well to direct their efforts to knowledge-enhancement within networks