Geographical Location and Internationalization: Small and Medium Enterprise Entry into Cambodia, Laos, Myanmar, and Vietnam
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Abstract
Porter (2000) proposed the notion of location as a competitive advantage, a way to generate advantages for regions, nations, and even firms. Small and Medium Enterprises (SMEs) are one factor in the quest to pursue national prosperity. SMEs may create competitive advantages for countries as well as at the regional level, a point that is understood by the Association of Southeast Asian Nations (ASEAN) even though public sector support for SMEs is very limited, especially in the internationalization process. Lack of consistent policy initiation and implementation has led to uncertainty for business firms. The CLMV region consisting of Cambodia, Laos, Myanmar, and Vietnam is an area that other ASEAN members may explore to find opportunities for international market expansion. This paper highlights factors that influence the internationalization process in respect to the competitiveness of location. The proposed model identifies factors that influence international market expansion, which include product competitive advantage and firm characteristics. These influences are moderated by market accessibility, financial resources, innovation, and networking. The paper also suggests several propositions intended to increase the effectiveness of the internationalization process for SMEs that are interested in regional expansion.
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