Institutional knowledge in Latin American SMEs

ABSTRACT

This study explores the perceived importance of institutional knowledge on small firm’s ongoing business internationalization. The sample consists of 200 exporting small and medium-sized enterprises (SMEs) from two Latin American emerging economies Chile and Peru. The theoretical framework integrates institutional knowledge and the internationalization of SMEs. Hypotheses are tested using structural equation modeling. We extend SMEs internationalization research by differentiating between types of experience in foreign markets, and how this develops institutional knowledge for SMEs. This is associated with contextual conditions in emerging markets. To build institutional knowledge, Latin American SMEs need to conduct several businesses in one country. This finding differs with previous studies in developed countries where SMEs need to conduct multiple businesses in different countries.