The Engine of Expansion: How Network Capital Fuels SMEInternationalization through Innovation Strategy

Demonstrating that they draw on network capital, the internationalization of small and medium-sized enterprises (SMEs) is a resultant ‎innovation strategy. In this study, which focuses on network theory and the resource-based view, we aim to investigate the intermediary role ‎of innovation strategy and how traits in China's entrepreneurial system can moderate the direct correlation between network capital & ‎internationalization. Specifically, we seek to understand how reliant China is on others for networking resources. Based on survey data from ‎‎342 Chinese hi-tech SMEs, structural equation modeling analysis reveals that network capital has a significantly positive impact on ‎internationalization performance through access to various resources, social networks that can directly lead to market entry, and partnerships ‎with influential partners, including customers, suppliers, and competitors. These relationships are partially mediated by innovation strategy. ‎Again, government policy support makes the connection between network capital and innovation strategy stronger. However, the study ‎reveals that the development of SMEs 'internationalization process is based on a solid foundation of micro-level factors. It expanded by ‎virtue of these issues faced by small and medium-sized enterprises from third-world countries entering first-world markets. For ‎policymakers and managers, there are several practical implications of this research‎.