THE EFFECT OF FINANCIAL, HUMAN RESOURCE, AND DIGITAL TECHNOLOGY FACTORS ON INTERNATIONALIZATION BARRIERS AND THEIR IMPACT ON MSMEs PERFORMANCE (A QUANTITATIVE STUDY IN THE FOOD & BEVERAGE INDUSTRY)
Description
This study tested the standard assumption that internal resource constraints (financial, human resource, digital technology) raise internationalization barriers and hurt performance in small businesses, using survey data from 110 pre-export food and beverage MSMEs in Jabodetabek, Indonesia (firms that have never exported), analyzed via PLS-SEM across 10 hypotheses drawn from the Resource-Based View and Uppsala Model. The results split along one clear seam: financial and human resource constraints did increase perceived barriers as predicted (H1, H2 supported; digital constraints, H3, fell just short of significance), but everything downstream of barriers reversed — barriers, human resource constraints, and digital constraints all increased rather than decreased performance (H4, H6, H7), financial constraints had no effect on performance (H5), and mediated pathways through barriers followed the same reversed or null pattern (H8–H10) — despite the model fitting well (R²=0.728 for barriers, R²=0.615 for performance), meaning these are precise, real effects pointing the "wrong" way rather than a weak model. The authors interpret this as a theoretical boundary condition tied to pre-export status: since none of these firms have entered foreign markets, "barriers" function as anticipatory self-assessments rather than costs currently paid against purely domestic revenue, and constraint-awareness may proxy for managerial sophistication — owners who can name their firm's gaps are plausibly the same owners running the domestic business well, producing a real but non-causal positive link. A methodological alternative is acknowledged: common method variance from the single-source, cross-sectional design is a plausible partial contributor, supported by elevated collinearity on the two constructs central to the reversals, though a Harman's test stayed under the danger threshold. Practically, the findings suggest internationalization-barrier theory built from active exporters doesn't automatically transfer to firms that haven't tried yet; reducing perceived barriers alone likely won't help pre-export MSMEs, since what's missing is the experiential engagement that converts perception into real operational cost. Researchers extending this work should look for the same H1–H3-supported/H4–H10-reversed pattern, ideally with stage-comparative or longitudinal, multi-source designs to separate the cognitive-barrier explanation from common-method bias. The results shouldn't be over-generalized as "constraints help firms succeed" — the positive links are specific to domestic performance among never-exported firms, and the theory's original negative logic may still hold once these firms actually attempt exporting.
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Institutions
- President UniversityWest Java, Bekasi