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SME International innovation and strategic adaptiveness: The role of domestic network density, centrality and informality

Purpose - The purpose of this paper is to examine the role of small and medium sized enterprises’ (SMEs) domestic network structural attributes on their ex-post internationalisation strategic innovation and adaptiveness in the host country. Design/methodology/approach - The model fit of SME domestic network structural attributes and their ex-post international performance was examined using structural equation modelling on data gathered from a sample of 263 SMEs from Croatia, a transition and emerging economy. Hierarchical regression analysis was further performed to test both the direct and moderating effects. Findings - The study revealed that domestic network informality moderates the link between SME domestic network centrality and their international innovation. Similarly, the findings show that domestic network informality strengthens the negative association between domestic network density and SME international innovation and strategic adaptiveness. Moreover, the study did not find any direct impact of these domestic networks’ structural attributes (density and centrality) on SME international innovation and strategic adaptiveness. Originality/value – Scholars have emphasised the importance and urgency for further research attention on the role of networks on SMEs’ internationalisation activities from emerging economies. This study responds to this call, and to the knowledge of the authors, is the first to examine the role of domestic network attributes on SME international performance in emerging economies. The findings provide new insightful contributions to the social network perspective and the international entrepreneurship literatures.

Domestic network density, network centrality, network informality, international strategic innovation and adaptiveness, SMEs, Croatia

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