Internationalization of Firms from Economies in Transition
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Internationalization of Firms from Economies in Transition

The Effects of a Politico-Economic Paradigm Shift

Edited by Mai Thi Thanh Thai and Ekaterina Turkina

This book provides a detailed analysis of how and why firms from economies in transition internationalize and examines the effects of domestic politico-economic factors on this process.
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Chapter 14: Exploring the influence of the national institutional environment on SME exporters: comparative evidence from Tajikistan and the Kyrgyz Republic

Dilshod Makhmadshoev and Mike Crone


The internationalization of firms - understood as 'the process of increasing involvement in international markets' (Wright et al., 2007, p. 1014) - has been a persistent theme in international business (IB) research. For small and medium enterprises (SMEs), direct or indirect exporting typically represents the most likely and realistic mode of internationalization (Ibeh, 2006; Sousa et al., 2008). There is a significant body of literature on the determinants of export performance and barriers to exporting for SMEs (for example, Aaby and Slater, 1989; Chetty and Hamilton, 1993; Kaleka and Katsikeas, 1995; Kent et al., 2006; Leonidou, 1995a, 1995b, 2004). Many of these studies emphasize the role of internal factors (that is, factors inside the firm) such as managers' international experience and firm resources and capabilities, and some point to the influence of external factors (that is, factors outside the firm) such as macroeconomic (in)stability, government regulations, the strength of foreign competition, and linguistic and cultural barriers. However, few studies to date have explicitly focused on the influence of the home-country institutional environment on exporting or internationalization, despite the growing popularity of institutional approaches across the social sciences, including business and management studies (Sousa et al., 2008; Wheeler et al., 2008; Zou and Stan, 1998). Recently, some authors have argued that the omission of institutional environments from studies of exporting has seriously limited our understanding of the phenomenon (Gao et al., 2010).

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