Dynamic capabilities as a moderator: enhancing the international performance of SMEs with international entrepreneurial orientation

Abstract

This paper explores the impact of International Entrepreneurial Orientation (IEO) on the international performance of Small and Medium-sized Enterprises (SMEs), with a focus on the post-COVID-19 era. IEO, treated as a subdimension of entrepreneurial orientation, is crucial for SMEs in global markets, especially given the challenges posed by the pandemic. The study examines dynamic capabilities as a moderating factor in the IEO-international performance relationship, based on the resource-based view (RBV). A survey involving 120 internationalized SMEs from industrial and service sectors was conducted, and data were analyzed using Structural Equation Modeling (SEM) through Partial Least Squares (PLS). The findings indicate that seizing and reconfiguring capabilities significantly enhance the IEO-international performance link while sensing capabilities do not show a notable impact. This research contributes to the literature by affirming the role of dynamic capabilities in strengthening SMEs’ international performance through IEO, highlighting the differential impact of various dynamic capabilities, and offering insights into the specific roles of these capabilities as moderators in the IEO-international performance relationship. The study underscores the importance of strategic entrepreneurial orientation and dynamic capabilities for SMEs in the global market.