How Network Capital Influences Degree of Internationalization? Case: Small Medium Industries in Indonesia

Ginting, Ginta (2014) How Network Capital Influences Degree of Internationalization? Case: Small Medium Industries in Indonesia. In: SIBR Bangkok Conference, 4-8 Juni 2014, Bangkok, Thailand.

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Abstract

Trade liberalization and market globalization become a good momentum for the Small Medium Industries (SMIs) to engage in international business through exports. Within a decade, the number of SMIs that export shows an increasing trend along with the development of ICT (Information Communication Technology). However, for SMIs businesses in international market poses significant challenges because they still have a low competitiveness. Therefore, strategy to increase competitiveness becomes an important agenda for SMIs with optimum facilities of stakeholders. This research aims to investigate the influence of network capitals and the internationalization degree of SMIs. Measurements on research variables were made to determine the relationship and influence of variables. Methods of analysis used isverificative. Hypothesis testing uses multivariate statistics- Partial Least Square. The population of this research is owners/managers of SMIs in Indonesia who do international businesses (export oriented). The election of sampling used is stratified random sampling. The total sample is 186 SMIs in 3 provinces in Indonesia (DKI Jakarta, Banten and West Java). The study shows that degree of internationalization is determined by the network capital. This means the higher the network capital, the bigger the impact to the increasing of the degree of internationalization.

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