The Belt and Road Initiative and East African small and medium-sized enterprises: benefits, drivers and particular sectors

Abstract

PurposeDrawing upon the institutional theory, the present study investigated whether or not small and medium-sized enterprises (SMEs) in East Africa benefit from the Belt and Road Initiative (BRI), and how the latter influences the internationalization of the former.Design/methodology/approachAn in-depth interview was conducted by using 26 SME managers/owners who are engaged in international activities in the “Belt and Road” countries. The sample was chosen from four East African countries across three industries. The theoretical framework emerged from the grounded theory analysis of the primary data.FindingsThe authors found that the BRI as a formal institutional force generates both direct and indirect influences on SMEs internationalization. Three key driving forces, namely partnerships, specialized services and innovativeness underpin the internationalization of SMEs. Additionally, sectoral analysis of the similarities and differences in responses reveals no remarkable differences in the drivers and impact of the BRI on SMEs in all the three industries investigated.Research limitations/implicationsThe internationalization process of East African SMEs could be augmented through formal institutions like the BRI, and the internationalization of SMEs along the “Belt and Road” countries mimic an integrative approach. The theoretical framework demonstrates significant potential for further benefits that SMEs may obtain through the BRI by taking advantage of certain BRI opportunities and adopting crucial strategies to internationalize rapidly.Originality/valueThis is the first study to employ a qualitative approach to study the influence of the BRI at the firm-level. Specifically, the paper covered the hub of BRI countries in East Africa. Hence, the study makes substantial theoretical and policy contributions to the literature.