Exploring the role of business diplomacy in enhancing legitimacy during the internationalisation of small and medium-sized enterprises from home to host countries: Evidence in Vietnam

Research on the role of business diplomacy in enhancing organisational legitimacy among Vietnamese enterprises during the internationalisation process is limited, particularly in the context of emerging economies. This gap is essential because legitimacy determines the ability to enter fore in markets and survive in them. Based on legitimacy and institutional theories, this study uses theoretically oriented inductive thematic analysis based on in-dept semi-structured interviews with 10 CEOs and senior managers of Vietnamese SMEs. The results identify two primary mechanisms: the creation of domestic institutional linkages and international multilateral dialogue, both of which contribute to legitimacy enhancement. Regarding practical implications, the article emphasises how SMEs can establish legitimacy through business diplomacy and non-business risk management within the scope of internationalization. This can be achieved by utilising institutional channels, certifications, and engaging in multilateral dialogue to enhance trust and facilitate market entry. This paper contributes to the existing theoretical framework in business diplomacy by positioning it as a strategic capability of SMEs that helps transfer legitimacy from the host country to the receiving country, thereby expanding theories of legitimacy and internationalization. The research clarifies the role of business diplomacy in reducing nonbusiness risks and increasing the legitimacy of SMEs, while providing a new understanding of the mechanisms of business internationalization from emerging economies.