Internationalization of SMEs through MNCs Social Capital in African Countries

Abstract – The paper examines the importance of internationalization of SMEs in the current global set up of international trade. The study identifies the existing MNCs social capital as critical to the growth of SMEs in Africa and promotion of both forward and backward linkages between SMEs and MNCs. Approximations in the studies done accentuates that approximately 95% of the running businesses in the world are Small to Medium Enterprises and they employ about 60% of the total working population and significantly add up to 40% of Gross Domestic Product. It highlights the role which can be played by the state to ensure sustainable economic growth is achieved by inclusion of SMEs in developmental policy. With the proliferation of regional trade agreements in Africa and continued opening of domestic markets to foreign suppliers through trade liberalization, policies have to be matched with external growth of SMEs and domestic industries. As businesses venture into the international markets there are prospects of internal growth and this result in the development of competencies, thus firming competitiveness of the firm in the long run. The paper is concerned with small enterprise development in African countries, concentrating on the interrogation of the prospective for making use of connections and relationships with large business organizations as part of a strategy for the development of the SMEs sector.

Keywords: internationalization, social capital, SMEs, MNCs, networking, linkages, globalization

[Cite as: Chiukira, L. (2021). Internationalization of SMEs through MNCs social capital in African countries. Diverse Journal of Multidisciplinary Research, Vol. 3, Issue 1, Pages 1-11.]