The Effect of Social Network on Small and Medium Enterprises’ Export Mode Choice
Firms’ resources, tangible and intangible, are critical for firms in formulating and developing domestic and international business strategy. Relative to Multinational Enterprises (MNEs), most of the Small and Medium Enterprises (SMEs) lack of resources especially tangible resources. Thus, many SMEs relies more on intangible resources and among them personal network and social media becomes critical in SMEs business strategy formulation. This study aims to examine the effect of social networks (personal network & social media) on Thai SME’s export mode choice. Using the sample of 350 Thai SMEs in manufacturing export sector, the logistic regression results indicated that personal networking in terms of getting acquaintance from government organization and social media networking effect the export mode choice. The more SMEs can employ network based on acquaintance from government organization, the higher SME applies direct export mode. It is also found that the higher level of SMEs social media usage in terms of getting export partner and brand awareness through social media networking, the higher the SMEs choose direct export mode. Thus, intangible network resources of SMEs have significant effect on their international expansion strategy formulation.