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Article

Global Mindset and Adaptive Marketing Capabilities in the Internationalization of Mature Chinese SMEs: International Opportunity Perspective

by
Hazem Ali
1,
Min Li
2,*,
Xunmin Qiu
2 and
Qamar Farooq
3
1
School of Economics and Management, Yiwu Industrial and Commercial College, Jinhua 321000, China
2
School of Innovation and Entrepreneurship, Wenzhou University of Technology, Wenzhou 325000, China
3
College of Economics and Management, Zhejiang Normal University, Jinhua 321000, China
*
Author to whom correspondence should be addressed.
Sustainability 2023, 15(3), 2044; https://doi.org/10.3390/su15032044
Submission received: 4 December 2022 / Revised: 17 January 2023 / Accepted: 19 January 2023 / Published: 20 January 2023
(This article belongs to the Section Economic and Business Aspects of Sustainability)
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Abstract

:
Despite the centrality of international opportunity concept in international entrepreneurship field, SMEs’ internationalization literature has focused mainly on SMEs’ international performance with limited attention paid by researchers to understanding the factors influencing the identification of international opportunities especially among mature internationalized SMEs. To this end, the current study examined the impact of SMEs managers’ global mindset (GM) and adaptive marketing capabilities (AMCs) on international opportunity identification (IOI) among mature Chinese SMEs with emphasis on the moderating impact of export market dynamism (EMD). Initial exploratory study using interviews with five managers of exporting SMEs was conducted to figure the relevance of GM and AMC in explaining IOI; and the presence of EMD. Later, self-administered questionnaires were used to collect data from founders/managers of 217 exporting SMEs. Findings showed that IOI is positively influenced by SME manager’s GM and AMCs. Despite the presence of EMD, it had no significant moderating impact on the relationship between GM and AMCs; and IOI. In the respondents’ characteristics analysis, it was revealed that no significant statistical impact of SME’s size, SME’s age, and SME manager’s international experience on IOI. This paper ends with drawing a set of implications and future research avenues.

1. Introduction

Governments develop favorable policies and provide financial and marketing support in order to encourage their SMEs’ expansion to foreign markets. Internationalization literature acknowledges the high involvement of SMEs in international markets [1,2,3]. Chinese SMEs have accelerated their engagement in international market with the last two decades [4]. For instance, the contribution of SMEs in China’s exports were 22.9% and 32.4% in 2012 and 2018, respectively [5]. In this regard, several studies were undertaken to explore different aspects of Chinese SMEs’ internationalization process [6,7,8]. However, such studies have focused mainly on understanding the barriers to entering a global market and the level of SMEs’ internationalization such as export intensity and geographic scope.
Research has advocated the international opportunity as a fundamental concept in internationalization literature [1,9,10]. In small business context, internationalization process is mainly related to identifying and exploiting business opportunities in foreign markets [11]. Lazaris and Freeman [12] highlighted the need to undertake more research on the factors affecting managers’ abilities to identify, evaluate and exploit international opportunities. This study builds on the IOI as a preamble stage of firm internationalization.
Internationalization literature acknowledges the vital role of GM in driving and facilitating firm internationalization. Managers who possess GM see the world as a one marketplace, willing to commit time and resources to pursue business opportunities and succeed in foreign market [13]. Lazaris and Freeman [12] underlined that cognitive complexity and cosmopolitanism dimensions of GM have a significant positive effect on the internationalization of SMEs. This study predicts that managers who possess GMs can better identify and exploit international opportunities effectively.
Given the fierce competition and availability of various products with similar features and prices, managers of mature internationalized SMEs need to possess AMCs to respond to different customers’ needs in foreign market. AMCs view stresses the need for firms quick adaptation to cope up with emergent competitive or uncertain conditions in their respective markets [14]. Marketing complexity triggered the need for companies to possess AMCs to cope with uncertain and dynamic business environment. In this respect, Day [15] stressed the need for organizational learning or accumulating experience continuous interactions with key players in both external and internal environment. Accordingly, exporting SMEs’ founders/managers need to possess marketing capabilities to compete effectively in foreign market.
Exporting SMEs may face challenges in identifying and exploiting business opportunities especially with the prevalent negative consequence of Covid 19 and ongoing market dynamism within the last three years. In assessing EMD, Cadogan et al. [16] advocated the need to measure rate of change, heterogeneity, and hostility inherent in the firm’s export markets whereas Ruiz-Ortega et al. [17] stressed the need to identify the frequency and level of availability of international opportunities, technological change and product, process or service innovation. This research assumes that exporting SMEs face business dynamism issues in their export markets and argues that SMEs’ founders/managers who possess GMs and AMCs are capable of identifying international opportunities even with the presence of EMD.
The majority of the internationalization literature focuses mainly on multinational corporations and international new ventures. In this regard, a remarkable research stream highlighted the need to address the internationalization of established companies [18,19,20]. Researchers labelled the established firms who extend their operations to foreign market as late internationals [21], mature or traditional firms [22] and mature exporters [18]. Despite the increasing calls for extending the domain of international entrepreneurship to different sectors of traditional industries [18,20], it still focusing on studying firms operating in high-tech industries [18,21,23]. Researchers use the terms ‘Traditional’ and “mature” to describe industries with a limited knowledge intensity and relying on low- and medium-technology. Such types of industries didn’t receive a sufficient research efforts in international entrepreneurship. Responding to calls for diversifying the domain of internationalization literature to include mature industries, our study argue that examination of international opportunity in relation to manager’s GM and AMCs with emphasis on the potential moderating impact of EMD has the potential to advance knowledge on IOI as a fundamental phase of SME internationalization.
Overall, this study intends to extend the existing literature on the internationalization of mature SMEs from the intentional opportunity identification perspective and to achieve the following specific objectives: (1) examine the effect of SME manager GM and AMCs on IOI, (2) examine the potential moderating impact of EMD on the relationship between GM and AMCs; and IOI; (3) identify whether there is a statistical significant association between SME’s age, size, and manager’s international experience; and IOI. The remainder of this paper is presented as follows: Section 2 introduces the theoretical background of this research and development of research hypotheses. Section 3 explain the overall research methodology used to undertake the current study. Section 4 and Section 5 present the results of the study and discussions in light of current literature. Theoretical and policy implications are highlighted in Section 6. Section 7 determines the research limitations and suggested research areas. The paper ends by drawing a set of concluding remarks.

2. Literature Review and Hypotheses Development

2.1. Theoretical Framework

The strategic thought in business and management fields is dominated by three main research streams: dynamic capabilities view, AMCs view and resource advantages theory [24]. These research streams explain how firms renew themselves in the marketplace responding to hypercompetitive, dynamic and global economy, and determines whether the firm’s strategy should be dynamic or static, and determines whether the strategic focus should be “outside-in” or “inside-out”. This study builds on two fundamental research streams: dynamic capabilities and adaptive marketing capabilities view to explain IOI among mature Chinese SMEs.
Researchers have argued that RBV doesn’t consider the dynamism of business environment and proposed dynamic capabilities view as essential extension to RBV [25,26,27]. In international business context, dynamic capabilities view was proposed as a significant theoretical framework to explain firm internationalization as most of the internationalization theories did not pay attention to environmental dynamism [27]. Dynamic capabilities view denotes the important role of managers in utilizing and reconfiguring organizational resources, which is essential to understanding the impact of management characteristics and firm internationalization [25,28]. This research goes in line with the view presented by Blesa [29] which argues that internationalization can be described as a process driven by dynamic capabilities pertaining to identifying and exploiting business opportunities in global market.
On the other hand, AMCs view underlines that companies can adapt rapidly to emergent changes in their respective markets [14]. Day [15] categorized AMCs into: (1) vigilant market capability, which anticipates and captures market insights and changes based on emerging technologies and early warning system; (2) adaptive market experimentation, which maintains a constant learning from market experiments; and (3) open marketing capability, which allows firms to develop, maintain and make use of relationships with partners using social networking and new media technologies. In other words, AMCs pertain to proactive sensing and acting on market signals, constant learning from market experiments, and coordination and integration of social resources to predict industry trends and adapt to market changes. Building on Day’s definition, this study defines AMCs within SMEs operating in international market as SME’s manager’s adaptive capability to capture and act on market change and explore business opportunities in global markets. Further, this study argues that founders/managers of mature SMEs are capable of identifying international opportunities based on their AMCs in global dynamic business environment. Figure 1 depicts the proposed conceptual framework.

2.2. International Opportunity Identification

As a well-known concept in internationalization literature, international opportunity was defined as “the cognitive and behavioral processes associated with the creation and exchange of value through the identification and exploitation of opportunities that cross national borders” [18]. The research stream of firm internationalization employs the opportunity-based view to explain the processes of firms’ internationalization and divide it into IOI and international opportunity exploitation [9,18,30]. This research focuses mainly on IOI as an initial stage of firm internationalization. Mainela et al. [31] called for more research on explaining why some entrepreneurs can effectively recognize international opportunities through their behavioral drivers and sense-making mechanism.
Extant literature on SME internationalization view IOI as the fundamental determinant of firm’s internationalization process [32,33,34]. In view of the IOI, Bingham et al. [35] advocated the unique characteristics, timing demands and combination of attributes of each international opportunity. The current study argues that managers operating in mature industries are capable of identifying international opportunities through their GM and AMCs.

2.3. Global Mindset and International Opportunity Identification

Despite the fact that GM is a mature concept in international business, it has been rarely used to explain SMEs internationalization from the international opportunity perspective. Managers with GM are capable of balancing foreign market opportunities and firm’s resources with responding value offerings [36]. Eriksson et al. [37] indicated that GM is a fundamental meta-capability required for successful firm internationalization. Kyvik et al. [3] found that global managerial mindset has a strong relationship with Norwegian and Portuguese SMEs internationalization. The authors argued that managers with GM are capable of processing information in international market, identifying commonalities in foreign market, and achieving resource integration and collaboration with local partners in order to respond to the needs of different foreign customers. Similarly, Torkkeli et al. [38] advocated the continued relevance of GM as a prerequisite for SMEs internationalization. SMEs’ managers use their mind-set screen and capture international opportunities [39,40]. Costa et al. [41] argued that manager’s internationalization mindset can explain a venture internationalization behavior even before its launch and affect their engagement in internationalization activities in subsequent years. This study intends to bridge this gap through examining the impact of GM on IOI in Chinese context. Accordingly, the first research hypothesis is derived as:
Hypothesis 1 (H1):
International opportunity identification is positively associated with SME manager’s global mindset.

2.4. Adaptive Marketing Capabilities and International Opportunity Identification

Extant research presents an increasing consensus on the positive relationship between AMCs and firm performance in foreign markets. AMCs allow companies to identify and capitalize on market opportunities [42], reconfigure their resources in dynamic business environment rather than using available resources in responding to existing demands and enhancing firm’s innovativeness, speed-to-market, and achieving commercial success of firm’s products or services [43]. Building on opportunity-resources integration view, Shen et al. [44] argued that AMCs have significant impact on identifying and exploiting international opportunity and firm’s sustainable innovation performance. Reimann et al. [45] found that AMCs have a significant positive impact on the international performance of Portuguese SMEs.
Guo et al. [46] examined the impact of three types of marketing capabilities on firm performance: static, dynamic and adaptive, and indicated that AMCs have the highest significant effect on market performance. This study argues that exporting SMEs’ managers with AMCs can effectively identify business opportunities in foreign market. For instance, managers with AMCs can detect market signals, use emergent technologies and networks to collect and share market information, learn from other parties (competitors and channel partners), and collaborate with partners for building a strategic partnership, achieving synergy and resource integration. Therefore, the second research hypothesis is stated as follows:
Hypothesis 2 (H2):
International opportunity identification is positively associated with SME manager’s adaptive market capabilities.

2.5. Moderating Role of Export Market Dynamism

Previous research highlighted the need to test the moderating impact of environmental contingencies on the relationship between market orientations and export performance especially when research findings are inconsistent [47,48]. Ciszewska-Mlinarič and Trapczyński [48] argued that researchers advocated the need to investigate the importance of adaptation in relation to firm performance in foreign markets. Hunt and Madhavaram [24] argued that the process of competition is influenced by changes in some environmental factors such as changes consumers’ needs, and competitors’ resources and market offerings.
In their research on the internationalization of Finnish companies, Cadogan et al. [16] found that market dynamism has a significant positive moderating impact on the relationship between export market-oriented behavior and export performance whereas Ali et al. [49] argued underlined that unfavorable environmental dynamism had a negative impact on the internationalization level of Malaysian SMEs. Managers with GM deal effectively with dynamism and complexity of multicultural business environments [50], identify and respond quickly to changes in international business environment [51]. Similarly, managers need to use their cognitive characteristics to interpret the environment and to reconfigure their capabilities in order to align with emergent business opportunities [52]. This research assumes that EMD may have a remarkable moderating role on the direct impact of AMCs and GM on IOI. For instance, SMEs managers with GMs may capture new international opportunity in the presence of unfavorable EMD such as changing customer preferences or unfavorable changes in customs regulations. Accordingly, the third research hypothesis is set as follows:
Hypothesis 3 (H3):
Export market dynamism has a significant moderating influence on the relationship between global mindset and international opportunity identification.
Internationalization research stresses the importance of internationalized firms’ adaptations based on the foreign country’s market characteristics [31,53]. SMEs can overcome resource limitation required for international expansion and to improve their export performance through adapting, integrating and reconfiguring their external and internal marketing capabilities for foreign markets [52]. AMCs allow enterprises to detect market signals and changes especially when some potential opportunities and threats arise initially as ambiguous and weak [54]. Cadogan et al. [55] found that market dynamism moderates the relationship between export market orientation and export performance especially when dynamism in export market enhances the divergence between firms’ offerings and foreign customers’ preferences. In their research on the moderating impact of market and technological dynamism, Mao et al. [56] argued that the relationship between firm’s integrator’s coordination and firm’s technological innovation performance was strengthened by technological dynamism and weakened by market dynamism. Further, firms with AMCs can accelerate their adaptability to changes in competitive environment through deep market observation, constant market learning, collaboration with partners, and cultivating market discrimination using marketing experiments [57]. Therefore, the fourth research hypothesis is set as follows:
Hypothesis 4 (H4):
Export market dynamism has a significant moderating impact on the relationship between adaptive marketing capabilities and international opportunity identification.

2.6. Managerial and SME’s Characteristics and International Opportunity Identification

Managerial characteristics are closely related to driving firms’ engagement in international markets [7]. Extant literature presents various control variables which affect SMEs internationalization such as firm age, firm size and sales volume [58,59]. Kyvik et al. [3] argued that some characteristics can influence on the development of entrepreneur’s GM such as work experience, networking capability, cognitive flexibility and propensity to interdisciplinary collaboration. Further, previous research findings revealed a statistical significant difference between SMEs size and age, and IOI. Firm age is significantly related to firms’ geographic scope of international activities and export intensity [60,61]. On the other side, a few scholars found that firm age had no significant association with export performance [60,62]. Further, internationalization research acknowledged the importance of possessing international experience in driving firms’ exporting performance [19,60,61]. Based on these arguments, we argue the IOI among mature exporting Chinese SMEs may differ based on their characteristics. This study has used three control variables: managerial level (manager’s years of international experience) and firm level (SME age and Size) to figure out the potential statistical significance in IOI based on these three characteristics. Hence, the fifth hypothesis is set as follows:
Hypothesis 5 (H5):
There is a statistical significant difference between managers and SMEs characteristics namely SME age, SME size; and SME’s manager’s international experience; and international opportunity identification.

3. Research Methods

3.1. Exploratory Interviews

At an initial stage of our research, we conducted exploratory interviews to ensure the applicability of GM and AMCs in the identification of international opportunities. We intended to confirm that founders/managers use their AMCs and GMs capabilities and don’t rely heavily on other factors such as networks and serendipity in identifying exporting opportunities. Additionally, exploratory interviews were employed to figure out the presence of EMD. In this regard, we aimed to identify the perceived EMD aspects and its consequences. Further, exploratory interviews were used to design and customize the survey questionnaire to Chinese context.
Based on frequent visits to Yiwu international trade market, we have selected five managers of exporting Chinese SMEs operating in textile and garments, plastic, and furniture industries and actively involved in exporting to global market. We explained the purpose of our study to our interviewees and ensured that they understand our research objectives. Interviews were conducted in Chinese language at the interviews’ offices during October/November 2021 and lasted for 30 to 45 min.
We employed a semi-structured and face-to-face interviews; and identified three pre-determined themes. First, we asked our informants about the existence of EMD within the last two years and illustrating the types of dynamism in foreign markets (e.g., change in customer needs, technology, products and services innovation). Second, we asked interviewees to evaluate the importance of possessing a GM in discovering and exploiting international opportunities. Third, we requested our informants to reveal their AMCs and its importance, if any, in enhancing IOI.
The findings of exploratory interviews allowed us to gain a bird eye view of the research context. Interviewees revealed that they encounter dynamism in their former export markets within the last two years due to the negative consequences of Covid 19 pandemic. For instance, three out of the five managers revealed that “they had to de-internationalize from some foreign markets and start to search for new international markets or recruit new international customers in former export markets”. In addition, they stated that international customers have demanded a fairly and high quality products and increased their expectation related to shipping and delivering products to the final destinations. However, managers indicated that their exporting performance has grown during 2021.
Further, managers acknowledged the influential role of AMCs and GM in identifying international opportunities. In this regard, all managers argued that their GM allow them to understand international customers’ demands, communicate with foreign customers effectively, and close a win-win deal. For AMCs, managers argued that they can customize a profitable yet affordable deals with foreign customers. Guided by such findings, we adapted the content of the survey questionnaire to the Chinese context and decided to proceed with the empirical data collection process.

3.2. Research Instrument

Online self-administered questionnaires were used for data collection through utilizing online survey tool called “Sojump”. Online survey tool allows researchers to maintain a representative sample and not to confine data collection to a specific region. Sojump is one of the largest and well-known online survey provider with more than 2.6 million registered users via its hosting website “www.sojump.com”. Various studies utilized Sojump online survey tool [33,63]. A total of 2000 members of nation-wide SME trade association were invited to participate in this research using WeChat application. The questionnaire was carefully translated into Chinese language (simplified mandarin) and revised by two bilingual scholars with relevant business and management background.
Exporting SMEs’ managers were selected as target population for this research. Extant literature underlined that SMEs’ involvement in international market is mainly driven by their managers/founders [4,8,64]. Zhao et al. [65] indicated that the size of Chinese SMEs can be identified as follows: micro enterprise (less than 50 employees), small enterprise (51–150 employees), and medium enterprise (151–600 employees). Recognizing the wide definition of Chinese SMEs and the involvement of SMEs in different manufacturing industries, the current study did not emphasize on a specific SME industry. A total of 217 questionnaires were collected and used for data analysis out of 2000 invitations. Such low response rate can be justified based on the sampling criteria. We have focused mainly on mature SMEs operating in traditional industries and excluded IT-based SMEs and international new ventures.
Survey questionnaire has two sections. First section involved general information about SMEs and their managers such as firm age, firm size, manager’s international experience, and type of industry. Given the research aim to examine IOI among mature industries, we focused mainly on four types of industries: textile and garment, Chemical, rubber and plastic products, metal and machinery, and electrical products [22,23,32]. Second section focused on measuring respondents’ perception of four major concepts: GM, AMCs, EMD, and IOI using five point Likert scale.

3.3. Measures

The study constructs were measured using a well-established measurement scales from internationalization literature to ensure the reliability and validity of the survey questionnaire. Additionally, the findings of the exploratory interviews were considered in designing the survey questionnaire. GM was measured using three item scale based on Felício et al.’s. study [50]. The three items explain the manager’s cognition, knowledge and behavior toward international market as proposed by [13]. The second independent variable, adaptive marketing capability was measured using the measurement scale developed by Guo et al. [46] scale. This scale has 12 items comprising of three main dimensions: open marketing capabilities, market experimentation capability, and vigilant market capability. IOI was assessed based on the three items adapted from [36]. Finally, the moderating variable, EMD was measured using 5 items developed by Cadogan et al. [16]. These items focused on measuring the change in export customers’ product preferences, product-related needs, change in type of product or services, and looking for new products. Appendix A lists the questionnaire items used in measuring the study constructs. Further, three control variables were used to examine the potential statistical difference in IOI based on SME’s age and size and managers international experience as shown in Table 1.

4. Results

The profile of sample exporting SMEs is shown in Table 1. Descriptive findings showed that out of the valid sample (217 Chinese exporting manufacturing SMEs), 70, 73, and 49 SMEs were aged in the ranges of less than 10 years, 11–15 years, and 16–20 years, respectively. Guided by Zhao et al. [65] categorization of Chinese SMEs based on firm size, findings showed that 44 are micro-enterprises, 82 are small-sized enterprises, and 91 are medium-sized enterprises. Such findings imply that mature Chinese manufacturing SMEs at micro, small and medium sizes are capable to identify business opportunities in foreign markets.
For international experience, 83 of Chinese SMEs managers had 11–15 years of international experience followed by 64 managers with international experience ranging between 6–10 years. Further, 92 of exporting SMEs are specializing in manufacturing of textiles and garments, followed by 67 SMEs specialized in manufacturing electrical products. Further, the main export destinations of Chinese mature SMEs are the African market (43.3%) and Middle-east market (30.5%).

4.1. Assessment of Measurement Model

This research used construct reliability and validity tests to assess the measurement model. Reliability of a construct measures the internal consistency and is measured by Cronbach alpha and factor loadings. Researchers acknowledge that a construct is reliable when the construct has a Cronbach’s alpha value of 0.7 and the item factor loadings value is 0.70 and above [66]. Research findings revealed that all constructs reported Cronbach’s alphas above 0.70 threshold and all of the constructs have item loadings higher than the recommended 0.70 as shown in Table 2.
Construct validity is often measured using convergent and discriminant validity. Convergent validity of a construct is achieved when the average variance extracted (AVE) is higher than 0.50 threshold and composite reliability (CR) is higher than 0.70 threshold. From Table 2, all constructs have fulfilled the convergent validity requirements as the reported composite reliability values higher than 0.70 and average variance extraction values higher than 0.50. On the other hand, discriminant validity is achieved the correlation of a factor is higher than with any other construct on its scale. Further, the discriminant analysis showed that all factors had higher loadings than their loaded than corresponding factors on the same scale and all factors had composite reliability values higher than 0.70 threshold as shown in Table 3.
Moreover, we have used a collinearity assessment test to figure out the potential presence of common method bias in PLS-SEM as recommended by Kock [67]. Findings showed that the data have no issues with common method bias as the reported values inter-construct VIF were less than 3.3 as shown in Table 4.

4.2. Results of the Structural Model

The results of structural model are presented in Table 5. The fundamental measures used for illustrating the results of a structural model are the regression weights (path coefficients), t values, and p values for significance of t statistics. Path coefficient was measured and analyzed using bootstrapping. The results of structural model showed that variation in IOI explained by AMCs and GM is 76.8% (R2 0.768) as depicted in Figure 2.
Figure 2 illustrates the regression weights. The first hypothesis predicted that GM would have a significant positive impact on IOI. The research findings reveal that GM has a positive significant impact on IOI (β = 0.246; t = 2.137; p = 0.029). Therefore, the first hypothesis is accepted. The second hypothesis tested the relationship between AMCs and IOI. Findings show that AMCs has a significant positive impact on IOI (β = 0.421; t = 3.828; p = 0.000). Based on these findings, the second hypothesis is accepted.
The third hypothesis proposed that EMD would moderate the relationship between AMCs and IOI. Findings show that EMD has insignificant negative moderating impact on the relationship between AMCs and IOI (β = 0.241; t = 1.616; p = 0.112). Therefore, hypothesis 3 is declined.
Hypothesis 4 predicted that EMD would moderate the relationship between GM and IOI. Research findings report that the moderating impact resulting from the interaction between GM and EMD with IOI is positive and statistically significant (β = 0.241; t = 2.079; p = 0.049). Accordingly, the fourth research hypothesis was declined. Finally, the fifth research hypothesis predicted a significant statistical difference between SME age, SME size, and SME’s manager’ international experience, and IOI. Further, the research findings revealed that none of SMEs characteristics: age, size, and international experience has significant association with opportunity identification (β = 0.083; t = 0.889; p = 0.342), (β = 0.043; t = 0.670, p = 0.420), and (β = 0.013; t = 0.155; p = 0.870). Thus, hypothesis 5 is declined.

5. Discussion

According to our research findings, SMEs’ manager’s GM is positively related to IOI. This finding is consistent with extant literature [3,33,38,50]. Our study findings on the positive impact of managers’ GM on international opportunities identification are similar to He et al. [33] study. However, their research has examined the mediating impact of international networking and knowledge acquisition on the relationship between GM and IOI while our study examined the potential moderating impact of EMD. They indicated that GM has a significant impact on SMEs internationalization process by enhancing SMEs’ manager networking and international knowledge. Authors argued that GM allow SMEs’ managers to become involved in knowledge acquisition and international networking activities to gain knowledge or the customers in foreign markets, which in turn leads to developing business opportunities in international market. Our research findings support the notion that GM is an essential prerequisite for SME internationalization, combating shortage of resources and foreign market complexity and contributes effectively to identification of business opportunities in international market [50]. It is evident that global minded managers are well prepared to identify international opportunities. Therefore, we argue that GM encourages managers to expand their businesses beyond local context and seek business opportunities in international market.
This study revealed that IOI depends on SMEs’ manager’s AMCs. This finding is compatible with previous studies [29,44,68]. Polat [43] argued that AMCs contribute to enhancing firm’s innovativeness, speed-to-market, and achieving commercial success of firm’s products or services, whereas Shen et al. [44] underlined that AMCs contribute to identifying and exploiting international opportunity. Ren et al. [69] stressed the need for internationalized SMEs to keep improving their marketing capabilities. Similarly, Heiss [70] argued that German SMEs’ export performance was positively related with their marketing efforts in foreign markets.
Our empirical findings revealed that EMD had no moderating role on the positive impact of GM and AMCs possessed by managers of SMEs on IOI. Interestingly, these findings are not consistent with extant literature. Research on SME internationalization emphasizes the adaptation and responding to market dynamism [16,47,55]. Such findings indicate that exporting SMEs’ managers are capable of avoiding the negative consequences of EMD and still able to identify international opportunities through their GMs and AMCs. Managers need to maintain AMCs due to the increasing dynamism and uncertainty of business competitive environment [57]. Moretta and Formisano [52] argued that SMEs’ managers who adapt, integrate and reconfigure their internal and external marketing capabilities can overcome resources limitation required for international expansion and improve their export performance. Internationalized managers need to possess GM to deal effectively with dynamism of multicultural business environments [50], and quickly detect emergent changes in international business environment [51].
Further, the results of our research showed that SMEs characteristics: size and age had no significant impact on IOI. This finding imply that Chinese mature SMEs’ managers can identify exporting opportunities regardless of their firms’ size and age or their international experience. The internationalization research acknowledge the importance of firm and managers’ characteristics in international business such as firm size and international experience [58,59]. Large sized SMEs maintain better chances to enter and compete in global markets due to the availability of reasonable resources and the capabilities to apply different alternatives and respond to specific needs of targeted foreign markets. manager’s international experience plays a leading role in explaining firm internationalization and is positively related to geographical scope of SMEs international activity and export intensity [60,62].

6. Implications

This research makes considerable contributions to international business and marketing literature by proposing and empirically testing a conceptual model connecting SMEs’ manager’s GM and AMCs to IOI and indicating that EMD had no impact on such relationship especially in the context of internationalized mature Chinese SMEs. The current study contributes to advancing international entrepreneurship literature by building on the dynamic capabilities and AMCs views in relation to the identification of international opportunities by mature SMEs operating in mature industries. Our study goes in line with [32,33] in extending current literature IOI as a preamble phase of SMEs’ internationalization. Our research contributes to empirical evidence related to explaining SMEs internationalization from the IOI phase [9,19,32,71]. The results of our study indicate that SMEs’ founders/managers depend mainly on their GMs and AMCs during their internationalization process. Despite the proliferation of studies on the GM and internationalization of SMEs, we believe that revisiting this relationship is vital due to the prevalence and continuing business dynamism caused by COVID-19. This research argues that exporting SMEs managers may face some market dynamism indicators in foreign markets such as change in customers’ product preference, change in product-related needs, and change in the type of products or services requested by foreign customers as well as looking for new products constantly. In addition, our findings ensured the applicability of AMCs view in explaining SME internationalization. To the best of our knowledge, this research contributes to international business literature by examining the role of AMCs in helping managers of exporting SMEs to identify international opportunities.
Regarding the policy implications, Chinese government may provide export support programs specifically to small firms operating in mature industries which involve financial and non-financial assistance to facilitate their global expansion through developing GM and AMCs. Recognizing their dominant role in managing SMEs, managers need to be aware of the available governmental support and promotional incentives and make use of them to enhance their export performance [72].
Based on the obtained findings, this study introduces a set of practical implications. The findings of this study imply that Chinese SMEs’ founders/managers possess and employ AMCs and GM to identify international opportunities regardless of surrounding EMD. Such findings explicate how Chinese SMEs’ managers identify business opportunities in international market in light of the implementation of China’s “One Belt One Road” strategy to foster Chinese SMEs integration in world economy. This implies that founders/mangers of Chinese SMEs employ their GM and AMCs to retain existing or recruit new international customers and avoid the negative impact incurred by COVID-19. Guided by the obtained findings, founders/managers of small firms operating in mature industries are advised to maintain AMCs to fulfil potential customized needs of foreign customers. In addition, they need to have a GM to better identify and exploit international opportunities. On top of setting and implementing favorable and needs-based exporting policies, Chinese government should help mature manufacturing SMEs in discovering international opportunities through providing educational programs to develop and enhance mature SMEs managers’ GM and adaptive marketing capabilities. For instance, export promotion and counselling agencies can design and implement specific educational and guidance program to enhance managers’ understanding of different export market destinations (e.g., African, European, middle-east) and aligning their marketing capabilities to potential international opportunities in such markets.

7. Limitations and Further Research

This research has some limitations. First, our study is cross-sectional in nature and presents only a snapshot view of internationalized SMEs’ managers. Therefore, more rigorous testing with bigger samples in different contexts is necessary for drawing a strong conclusions and generalizing research findings. Scholars stressed the need to distinguish between internationalization of international new ventures and traditional SMEs, and indicated that small firms adopt energetic internationalization approach which focuses on exploring opportunities in specific foreign markets [1,73]. Second, the current study focused mainly on how SMEs’ managers identify business opportunities in global market with no distinction between international new ventures and gradual internationalized SMEs. In their research on the internationalization of Swedish small companies in mature industries context, Galan and Torsein [32] stressed the importance of identifying primary and subsequent international opportunities. Our study focused solely on IOI as a subjective measure of SMEs internationalization. It deserves to mention that the current study makes no distinction between international opportunity recognition and IOI. In addition, this research considers international opportunity as the main cause for SME internationalization and doesn’t characterize it as international entrepreneurial opportunity [31]. Hence, future research may examine the impact of both global and local mindsets and AMCs on SMEs export performance with emphasis on the moderating impact of EMD. Further, employing qualitative research may present insightful and deep understanding of how SMEs’ managers perceive dynamism in export market and employ their GM and AMCs to effectively identify international opportunities in comparative manner. Hilmersson et al. [74] addressed the issue of developing international opportunity novelty by internationalized SMEs through identifying unforeseen customer demands and improvising new solutions to problems faced by foreign customers. In this respect, future research may examine the potential role GM and AMCs in identifying international opportunities through adapting to foreign customers’ needs and finding new ways to solve emergent problems hindering the accomplishment of an export transaction.

8. Conclusions

Building on the IOI lens of SMEs’ internationalization, the current study presented new insights to explaining SMEs’ internationalization. Findings revealed that AMCs and GM play a major role in allowing founders/managers of SMEs to identify international opportunities. Despite the presence of EMD as perceived by exporting Chinese SMEs, it had no significant moderating impact on the relationship between AMCs, GM, and identification of international opportunities. Such interesting findings advocates the influential role of AMCs and GM in identifying international opportunities and diminishing the unfavorable impact of EMD. Further, the results showed that Chinese mature SMEs’ managers are capable of identifying exporting opportunities regardless of their firms’ age and size and their international experience.

Author Contributions

Conceptualization: H.A., M.L. and Q.F.; data curation: H.A., X.Q. and M.L.; formal analysis: H.A., M.L. and Q.F.; methodology: H.A., M.L. and X.Q.; project administration: H.A., M.L. and Q.F.; resources: H.A., M.L. and X.Q.; supervision: H.A. and M.L.; writing—original draft: H.A. and M.L.; writing—review and editing: H.A., M.L. and X.Q. All authors have read and agreed to the published version of the manuscript.

Funding

This research received no external funding.

Institutional Review Board

This research has followed the guidelines of the Declaration of Helsinki, and approved by the school of Economics and Management, Yiwu Industrial and Commercial College.

Informed Consent Statement

Consent was obtained from all subjects involved in the study.

Data Availability Statement

The data presented in this study are available on a valid request from the corresponding author. The data are not publicly available due to permission requested from the Project supervisor: Dr. Ali.

Acknowledgments

Authors acknowledge the assistance provided by Yiwu Industrial and Commercial College in facilitating the data collection process.

Conflicts of Interest

The authors declare no conflict of interest.

Appendix A

Table
Table A1. Survey Questionnaire.
Table A1. Survey Questionnaire.
ConstructItem CodeCorrespondent Statement
Global MindsetGM1“ I see the world as single, vast market”
GM2“I consider firm internationalization as a means to achieve growth objectives”
GM3“I lead the firm to international market”
Adaptive Marketing CapabilitiesAMC1“I am highly sensitive to the market environment and have the capabilities to detect market signals accurately and timely”
AMC2“My company use different social network and media to collect extensive marketing information in global markets”
AMC3“My company is able to forecast market trends in international market based on past histories of consumer demand”
AMC4“I ensure sharing and distributing new market information to different divisions in a timely manner”
AMC5“My company conducts active market experiments or tests based on our own market forecast”
AMC6“ My company explores future market trends and develops potentially successful business models through trial-and-error and experimenting”
AMC7“My company takes advantage of emerging technologies to track market changes and learn from market experiments”
AMC8“My company actively learns from a wider range of peer companies, market leaders, and channel partners”
AMC9“My company actively builds a strategic partnership with companies that are complementary with our firm in terms of resources and capabilities”
AMC10“My company coordinates and collaborates with our partners to achieve synergy in effectively and quickly responding to market signals”
AMC11“My company improves the capabilities for constant technological and product innovation through resource integration with our partners”.
AMC12“My company enhances the capabilities of creating innovative strategies and tactics based on coordinating and collaborating with our partners”.
Export
Market Dynamism		EMD1“Our export customers’ product preferences change quite a bit over time”
EMD2“New export customers tend to have product-related needs that are different from those of our existing export customers”
EMD3“Our export customers tend to look for new products all the time”
EMD4“Our export customers tend to have a changing product preferences”
EMD5“We are witnessing changes in the type of products/services demanded by our export customers”.
International Opportunity IdentificationIOI1“International market offers us many exporting opportunities that our company can exploit”.
IOI2“Our company frequently identifies exporting opportunities in international market”.
IOI3“Our company frequently identifies ideas from international markets to develop new products”.

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Sustainability 15 02044 g001 550
Figure 1. Proposed Conceptual Framework.
Figure 1. Proposed Conceptual Framework.
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Figure 2. Regression Weights.
Figure 2. Regression Weights.
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Table
Table 1. Respondents’ profile (N = 217).
Table 1. Respondents’ profile (N = 217).
CharacteristicsDescriptionsFrequencyPercent
SME ageLess than 10 years
11–15 years
16–20 years
20 and above		70
73
49
25		32.3
33.6
22.6
11.5
SME Size
(Number of employees)		Micro: less than 50
Small: 51–150
Medium: 151–600		44
82
91		20.3
37.8
41.9
International Experience
(No. of years)		1–5 years
6–10 years
11–15 years
16–20 years
20 and above		17
64
83
39
14		7.8
29.5
38.3
18
6.4
IndustryTextile and garment
Chemical, rubber and plastic products
Metal and machinery
Electrical products		92
31
27
67		42.4
14.3
12.5
30.8
Major Export MarketsAfrica
Middle-east
North America
Latin America
Europe		94
66
12
30
15		43.3
30.5
5.5
13.8
6.9
Table
Table 2. Constructs Reliability and Validity.
Table 2. Constructs Reliability and Validity.
ConstructItemsFLCArho_ACRAVE
Global Mindset (GM)GM10.8330.8710.8730.9030.742
GM20.846
GM30.854
Adaptive Marketing Capabilities (AMC)AMC10.7380.8640.8670.8920.711
AMC20.750
AMC30.744
AMC40.825
AMC50.841
AMC60.841
AMC70.811
AMC80.867
AMC90.769
AMC100.782
AMC110.847
AMC120.738
Export Market Dynamism (EMD)EMD10.8630.8570.8580.8860.673
EMD20.876
EMD30.805
EMD40.870
EMD50.825
International Opportunity Identification (IOI)IOI10.8140.9020.9040.9210.763
IOI20.843
IOI30.863
Note: FL = factor loadings, CA = Cronbach Alpha, rho_A = reliability, CR = Composite reliability, AVE = average variance extraction.
Table
Table 3. Discriminant Validity.
Table 3. Discriminant Validity.
SMEASMESIEIOIGMAMCEMD
SMEA10.040.0860.0460.1290.1490.230
SMES 10.0260.1830.0920.4110.476
IE 10.0730.1120.2410.368
IOI 0.8610.3620.4630.418
GM 0.8240.5310.381
AMC 0.8110.519
EMD 0.785
Note: SMEA = SME Age, SMES = SME Size, IE = International Experience, IOI = international opportunity identification, GM = global mindset, AMC = adaptive marketing capabilities, EMD = Export market dynamism.
Table
Table 4. Results of Common Method Bias Test.
Table 4. Results of Common Method Bias Test.
GMAMCEMDIOI
GM-2.1051.6581.751
AMC1.838-1.9331.692
EMD1.9321.397-1.719
IOI1.6951.6811.837-
Note: IOI = international opportunity identification, GM = global mindset, AMC = adaptive marketing capabilities, EMD = Export market dynamism.
Table
Table 5. Results of Hypotheses Testing.
Table 5. Results of Hypotheses Testing.
Path RelationshipEstimatet Statisticp ValueResult
H1: GM → IOI0.2462.1370.029Accepted
H2: AMC → IOI0.4213.8280.000Accepted
H3: AMC * EMD → IOI0.2411.6160.112Rejected
H4: GM * EMD → IOI−0.2271.5670.137Rejected
H5a: SME Age → IOI
H5b: SME Size → IOI
H5c: International Experience → IOI		0.083
0.043
0.013		0.889
0.670
0.155		0.342
0.420
0.870		Rejected
Rejected
Rejected
Note: IOI = international opportunity identification, GM = global mindset, AMC = adaptive marketing capabilities, EMD = Export market dynamism, * = Interaction between independent and moderating variable.
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Ali, H.; Li, M.; Qiu, X.; Farooq, Q. Global Mindset and Adaptive Marketing Capabilities in the Internationalization of Mature Chinese SMEs: International Opportunity Perspective. Sustainability 2023, 15, 2044. https://doi.org/10.3390/su15032044

AMA Style

Ali H, Li M, Qiu X, Farooq Q. Global Mindset and Adaptive Marketing Capabilities in the Internationalization of Mature Chinese SMEs: International Opportunity Perspective. Sustainability. 2023; 15(3):2044. https://doi.org/10.3390/su15032044

Chicago/Turabian Style

Ali, Hazem, Min Li, Xunmin Qiu, and Qamar Farooq. 2023. "Global Mindset and Adaptive Marketing Capabilities in the Internationalization of Mature Chinese SMEs: International Opportunity Perspective" Sustainability 15, no. 3: 2044. https://doi.org/10.3390/su15032044

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