Bridging the learning divide: the role of institutional WOM in stimulating emerging countries’ SMEs internationalization

Abstract

Purpose The purpose of this study is to explore the relationship between experiential knowledge of foreign markets, institutional word of mouth (WOM) and small and medium enterprises’ (SMEs’) internationalization. Specifically, it aims to provide explanations of what and how cross-border experiential knowledge can be institutionally transmitted for SMEs’ internationalization purposes via WOM. Design/methodology/approach An exploratory approach was adopted within the phenomenological/qualitative research tradition. The data collection process was conducted through 23 semi-structured interviews with founders and chief executive officers of Saudi international SMEs. Findings The study’s findings confirm that SMEs seeking productive opportunities in the international market could improve their internationalization experience if they made proper use of institutional WOM as a catalyst for inter-firm learning. This concerns SMEs from emerging countries in particular as they are usually in a bid to legitimatize their presence in foreign markets. Originality/value The triadic relationship between experiential knowledge, institutional WOM and internationalization has not been previously researched. The current study, therefore, clearly adds value to the concept of WOM from three dimensions: institutionalization, cross-borderity and SMEs’ internationalization.