The Internationalization of SMEs: Motives and Barriers

This study answers questions about the motives and barriers to the internationalization of small and medium enterprises (SMEs). A literature review was conducted to identify relevant research findings on the motives and barriers to the internationalization of SMEs. The finding of the study is consistent with the Resource-Sector Model of SME Internationalization, that the internationalization motives of SMEs are classified into internal motives, namely increasing profits, availability of resources, creating market power, and business growth. While external motives are limited domestic market, competition, and proximity to customers and suppliers. In addition, the study shows that resource strength and owner-manager competence are the driving factors for the internationalization of SMEs. SMEs entering the international market will face internal barriers: human resources, product quality, and financial resources, and external barriers: business environment, government barriers, and socio-cultural barriers. This study contributes to providing new insights into consideration of opportunities and threats for the internationalization of SMEs.