Framework for the Internationalization of Manufacturing Small and Medium Enterprises in Times of Financial Crises: A Case Study of Iran

Document Type : Research Paper

Authors

1 Professor of Entrepreneurship, University of Tehran. Email: r_mkazemi@ut.ac.ir

2 PhD Candidate in Entrepreneurship, Kish Campus, University of Tehran

Abstract

Objective: This study aims to develop a comprehensive framework to support the internationalization of Iranian manufacturing small and medium enterprises (SMEs) during financial crises, addressing challenges posed by economic sanctions, currency devaluation, and global disruptions such as the COVID-19.
Methods: A qualitative methodology was utilized, employing thematic analysis of data collected through 20 semi-structured interviews with managers from SMEs in the automotive parts, food, industrial machinery, plastics, and pharmaceutical sectors. Data were analyzed using MAXQDA software, applying open, axial, and selective coding to identify key themes. Validity was ensured through data triangulation, inter-coder reliability (Cohen’s kappa = 0.82), and participant verification of transcripts.
Results: The analysis identified key drivers, including currency devaluation (85%), domestic market stagnation (75%), and opportunities in neighboring markets (95%). Major challenges included foreign currency payment difficulties (85%), logistical barriers (80%), and lack of awareness of international regulations (60%). Strategies encompassed flexible currency contracts (90%), barter trade (60%), cryptocurrencies (25%), and export-oriented technological advancements (55%). Market entry pathways, consistent with the Uppsala model, included commercial networks (95%), local agents (95%), and international exhibitions (45%). Outcomes comprised sustainable growth (85%), entry into new markets (75%), and job retention (60%). The proposed Structural Interpretive Model (SIM) integrates the Uppsala model, network theory, and risk management principles.
Conclusions: The SIM offers a practical framework for Iranian SMEs, validated through theoretical and practical triangulation, with potential applicability to other sanctioned economies. Recommendations include implementing training programs, enhancing government support, and investing in digital infrastructure to strengthen SME resilience and global competitiveness.

Keywords

References

References
1. Boso, N., Oghazi, P., & Hultman, M. (2017). International entrepreneurial orientation and regional expansion. Entrepreneurship & Regional Development, 29(1–2), 4–26. https://doi.org/10.1080/08985626.2016.1255430
2. Calof, J. L., & Viviers, W. (1995). Internationalization behavior of small- and medium-sized South African enterprises. Journal of Small Business Management, 33(4), 71–79.
3. Chandra, A., Paul, J., & Chavan, M. (2020). Internationalization barriers of SMEs from developing countries: A review and research agenda. International Journal of Entrepreneurial Behavior & Research, 26(7), 1371–1393. https://doi.org/10.1108/IJEBR-02-2020-0097.
4. Chandra, A., Paul, J., & Chavan, M. (2021). Internationalization challenges for SMEs: Evidence and theoretical extension. European Business Review, 33(2), 316–340. https://doi.org/10.1108/EBR-03-2020-0063.
5. D’Angelo, A., Majocchi, A., & Buck, T. (2020). External managers, family ownership and the scope of SME internationalization. Journal of World Business, 51(4), 534–547. https://doi.org/10.1016/j.jwb.2016.01.004
6. Dabic, M., Maley, J. F., Dana, L. P., Novak, I., Pellegrini, M. M., & Caputo, A. (2020). Pathways of SME internationalization: A bibliometric and systematic review. Small Business Economics, 55(3), 705–725. https://doi.org/10.1007/s11187-019-00181-6.
7. Ferrucci, L., Gölgeci, I., & Arslan, A. (2018). Internationalization of emerging economy SMEs: The role of institutional pressures and dynamic capabilities. European Journal of International Management, 12(5–6), 567–589. https://doi.org/10.1504/EJIM.2018.094614.
8. Freixanet, J., Renart, G., & Rialp, J. (2021). The impact of COVID-19 on the internationalization of SMEs: Evidence from Spain. Journal of Small Business Management, 59(6), 1137–1163. https://doi.org/10.1080/00472778.2021.1924386.
9. Jafari-Sadeghi, V., Nkongolo-Bakenda, J. M., Dana, L. P., & Anderson, R. B. (2020). Home country institutional context and entrepreneurial internationalization: The significance of human capital attributes. Journal of International Entrepreneurship, 18(2), 165–195. https://doi.org/10.1007/s10843-019-00264-2.
10. Johanson, J., & Vahlne, J.-E. (1977). The internationalization process of the firm—A model of knowledge development and increasing foreign market commitments. Journal of International Business Studies, 8(1), 23–32. https://doi.org/10.1057/palgrave.jibs.8490676.
11. Johanson, J., & Vahlne, J.-E. (2009). The Uppsala internationalization process model revisited: From liability of foreignness to liability of outsidership. Journal of International Business Studies, 40(9), 1411–1431. https://doi.org/10.1057/jibs.2009.43.
12. Kabanda, S., & Brown, I. (2017). A structuration analysis of Small and Medium Enterprise (SME) adoption of online marketing: A mixed-methods approach. South African Journal of Business Management, 48(4), 37–48. https://doi.org/10.4102/sajbm.v48i4.43.
13. Linan, F., Paul, J., & Fayolle, A. (2020). SMEs and entrepreneurship in the era of globalization: Advances and theoretical approaches. Small Business Economics, 55(3), 695–703. https://doi.org/10.1007/s11187-019-00180-7.
14. Misati, E., Walumbwa, F. O., Lahiri, S., & Kundu, S. K. (2017). A multi-level examination of the performance effects of strategic human capital in small- and medium-sized enterprises. Journal of Small Business Management, 55(S1), 89–108. https://doi.org/10.1111/jsbm.12358.
15. Moreira, A. C., Ribau, C. P., & Raposo, M. L. (2024). Internationalization of SMEs in turbulent environments: A research agenda. Journal of Small Business and Enterprise Development, 31(1), 1–25. https://doi.org/10.1108/JSBED-10-2023-0469.
16. Morgan, T., Anokhin, S., & Wincent, J. (2021). New venture internationalization from an emerging market: Unexpected findings from a longitudinal study. Journal of Small Business and Enterprise Development, 28(2), 185–204. https://doi.org/10.1108/JSBED-06-2020-0199.
17. Narooz, R., & Child, J. (2017). Networking and internationalization of SMEs in emerging economies. Journal of Small Business and Enterprise Development, 24(1), 130–147. https://doi.org/10.1108/JSBED-07-2016-0108.
18. (2021a). The digital transformation of SMEs. OECD Publishing. https://doi.org/10.1787/9789264393561-en.
19. (2021b). SME and entrepreneurship outlook 2021. OECD Publishing. https://doi.org/10.1787/9789264472570-en.
20. Oura, M. M., Zilber, S. N., & Lopes, E. L. (2016). Innovation capacity, international experience and export performance of SMEs in Brazil. International Business Review, 25(4), 921–932. https://doi.org/10.1016/j.ibusrev.2015.12.002.
21. Paul, J., Parthasarathy, S., & Gupta, P. (2017). Exporting challenges of SMEs: A review and future research agenda. Journal of World Business, 52(3), 327–342. https://doi.org/10.1016/j.jwb.2017.01.003.
22. Paul, J., Chandra, A., & Chavan, M. (2023). Internationalization challenges of SMEs: The role of institutions and economic sanctions. Journal of Small Business Management, 61(4), 1502–1529. https://doi.org/10.1080/00472778.2021.1924387
23. Pena-Vinces, J. C., Casanova, L., Guillen, J., & Urbano, D. (2017). International competitiveness of small- and medium-sized enterprises: Peru, a Latin-American emerging market. Emerging Markets Finance and Trade, 53(1), 150–169. https://doi.org/10.1080/1540496X.2016.1156525.
24. Sui, S., Baum, M., & Malhotra, S. (2023). SME internationalization in emerging markets: A dynamic capabilities perspective. Journal of International Management, 29(1), 100–122. https://doi.org/10.1016/j.intman.2022.100987.
International Journal of Business and Development Studies
Volume 17, Issue 2
October 2025
Pages 129-152

Files

Share

How to cite

Statistics