Performance relative to aspiration and SMEs' internationalization speed: the moderating effects of policy knowledge and institutional distance

PurposeThis study seeks to explore the relationship between performance relative to aspiration and SMEs' internationalization speed, and moderating effects of top management's policy knowledge and institutional distance between the above relation.Design/methodology/approachThis study tests the authors' hypotheses using data on Chinese manufacturing SMEs over a 5-year period from 2013 to 2017. The authors leverage archival panel data on publicly listed companies on the SME Board, GEM and New OTC Market in the Shanghai and Shenzhen Stock Exchanges. The authors then collected data from the WIND and ZEPHYR databases.FindingsThe results confirm a U-shaped relation between performance relative to aspiration and SMEs' internationalization speed, and show that this relation is steepening by top management's policy knowledge in home country but flattening by institutional distance as environmental dynamics.Originality/valueThe study findings contribute to the international business field by exploring how a firm's risk situation in internationalization can change, thereby influencing SMEs' international expansion.