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.
Hang et al. (Tue,) studied this question.