Foreign market-related knowledge absorption and the international financial performance of SMEs

Abstract

This study uses the absorptive capacity framework of Zahra and George (2002) to explain how exporting SMEs can achieve higher international financial performance. Based on the survey of 107 SMEs from the steel industry, results show that the impact of export knowledge processing on international financial performance is indirect, depending on the organizational process devoted to export knowledge absorption. The acquisition and assimilation of export knowledge have a direct influence on the export responsiveness capacity of SMEs, which ultimately allows them to derive higher turnover rates and profits from foreign market operations.