Influence of blockchain technology in sme

Corso di Laurea Triennale in

Economia Aziendale

Tesi di Laurea in Strategie per i mercati internazionali

L’influenza della tecnologia Blockchain

Sull’internazionalizzazione delle pmi indiane

The Influence of Blockchain Technology

On the Internationalization of Indian SMEs

Candidato/a Relatore A.A. 2023/2024

Giuseppe Basile Prof.

Diego Matricano

Matr.A07006160 A te...

29.

Technovation 115 (2022) 102518

Contents lists available at ScienceDirect

Technovation

journal homepage: www.elsevier.com/locate/technovation

Influence of blockchain technology in SME internationalization: Evidence

from high-tech SMEs in India

a b,* a a

Sandip Rakshit , Nazrul Islam , Sandeep Mondal , Tripti Paul

a Indian Institute of Technology, Dhanbad, India

b Department of Science, Innovation, Technology and Entrepreneurship, University of Exeter Business School, UK

A R T I C L E I N F O A B S T R A C T enterprises’ (SMEs)

Keywords: This study examines the impact of blockchain technology (BCT) on small and medium -sized

Blockchain technology internationalization. Further, it examines how Amazon as a platform reframes the global partnership environ -

SMEs ment via the BCT network that enables Indian SMEs to operate globally. Data were collected from 291 employees

Global operations at 43 high-tech SMEs in India. They revealed untapped interest in how Indian SMEs will use Amazon for global

High-tech firms operations. Several factors, such as processes to strategize, synergize, and standardize, are described as needing

3S Triangle model to be addressed before SMEs can boost integrated business efficiency, especially with regards to marketing ca-

Amazon pacity, scale, scope, and financial performance. The study represents a critical theoretical contribution to

Structural equation modeling Amazon-based global operations by developing the 3S Triangle Model, which could provide a basis for future

—and

business practice. Furthermore, the study defines and addresses the evolution of BCT that Amazon has used

continues to use—as a global operations platform. At the convergence of BCT, Amazon, and global retail ac -

tivities, we propose and advance an integrated model of BCT-driven global operations among SMEs that provides

a holistic view of state-of-the-art practices and exciting avenues for future study.

1. Introduction transparency, and precision (Ahluwalia et al., 2020a). Despite this

promising opportunity for SMEs to globalize their businesses by adopt-

Small and medium-sized enterprises (SMEs) play a significant role in ing BCT (Jin and Hurd, 2018), existing research often neglects the effect

economic development for most Asia-Pacific countries, particularly of BCT on global-market-entry strategy.

SMEs’ framework for SMEs’ global operations through

India (Weaven et al., 2021). traditional approach is inadequate to A BCT-based

sustain existing global business operations (de Villiers et al., 2020). Amazon is proposed to address the above challenges (Wong et al., 2020).

Studies have identified several reasons why operations of SMEs are This strategy combines BCT, smart contracts, and other related d e-

lacking: First, SMEs’ transactions are frequently maintained in velopments in global business operations (Ilbiz and Durst, 2019). BCT

conjunction with a centralized system backed by third-party software has the potential to solve problems inherent in SME global operations by

vendors (Woods et al., 2019). Second, there is a substantial amount of addressing issues of visibility and traceability; yet in order for the

scattered information throughout the dispersed lifespan, such as an technology to evolve and support SMEs, its implementation would be a

updated bill, assessments of real-time efficiency, and varying mainte- slow process and would require cooperation between various internal

nance requirements (Rakshit et al., 2021a,b). Third, standard informa- functional departments and different players. Prior research has inves-

tion frameworks do not have an efficient mechanism for exchanging tigated the theoretical underpinnings and internationalizing global op-

expertise and resources (Rakshit et al., 2021a,b). To compete with erations of SMEs (Merugula et al., 2021; Islam et al., 2021). While these

multinational competitors, SMEs must establish innovative market studies are significant, gaps exist in the relationship between processes

models focused on performance, sustainability, and higher pro- to strategize, synergize, and standardize and in the integrated business

and Gilmore, 2018).

duct/service quality (O’Dwyer The adoption of performance of SMEs (Paul, 2020). Additionally, these studies have

blockchain technology (BCT) could be a first step in addressing these highlighted a knowledge gap in applying BCT. As such, additional aca-

challenges. BCT is a groundbreaking technology in the financial world demic research is proposed to overcome it and improve BCT-driven

Amazon’s

that benefits from high confidentiality, irreversibility, delivery, global market operations. However, none of the studies

* Corresponding author.

E-mail address: N.Islam@exeter.ac.uk (N. Islam).

https://doi.org/10.1016/j.technovation.2022.102518

Received 16 June 2021; Received in revised form 11 March 2022; Accepted 19 March 2022

vailable online 26 March 2022

166-972/© 2022 The Authors. Published by Elsevier Ltd. This is an open access article under the CC BY license (http://creativecommons.org/licenses/by/4.0/).

Technovation 115 (2022) 102518

S. Rakshit et al. them successfully navigate difficulties of the current global market.

have assessed BCT-based theoretical underpinnings of SME interna-

tionalization and Amazon’s global operations. This study’s theoretical The paper is structured as follows: research is situated in a specific

framework is founded on the SCOPE framework and 5S Pentagon Model context, which is discussed in Section 2 by first providing an overview of

SMEs’

(Paul, 2020). Studying the influence of integrated business per- Indian SMEs and their global operations. Then, the justification for SMEs

formance in the global market via the lens of BCT-based marketing ca- using the Amazon platform for international expansion (drawing on

pabilities may shed light on the elements that contribute to enhancing BCT) is discussed. With its description of research frameworks, methods,

the international operations of SMEs. and tools, Section 3 describes the methodological procedure. Section 4

The primary goal of this research is to identify how scale, scope, and describes the findings and interpretation of blockchain domain dy-

paper’s

financial performance interrelate following adoption of BCT in global namics. The final section presents the conclusions, summarizes

operations among SMEs. Indeed, global operations represent an important observations across industries, and provides a series of lessons

important growth path, as SMEs stand to gain from engaging in cross- learned alongside their potential impacts.

border activities. Thus, by investing in and implementing BCT, SMEs 2. Literature review

can take advantage of new technologies designed to improve business

activities. Furthermore, BCT entails enhancements that r educe both 2.1. Indian SMEs’ global operations

processing errors and costs (in time and overhead) associated with

purchasing. These improvements are likely to boost organizational The SME sector’s relevance to and impact on India’s overall eco-

performance. The study examines how BCT influences the entrance of nomic growth is well known (Gherghina et al.,2020). SMEs seek to

Indian SMEs into the global market through the Amazon platform (Orji pursue a foreign market by finding new business fields (such as new

et al., 2020). Specifically, it answers two key research questions: (1) business exploration, new product development, partnership, licensing,

How do BCT systems influence the entrance of Indian SMEs into the and so on). For most countries in the Asia-Pacific region, like India,

global market? and (2) How does BCT impact integrated business per- SMEs play a crucial role in economic development. SMEs usually suffer

formance for SMEs in light of global market operations? from resource shortages in domestic and international markets relative

This study responds to these research questions in the following to major organizations. Since 1991, the Indian Government has eased

ways: First, it explains how SMEs can interact with BCT and integrate import controls, facilitating trade development to boost India’s eco -

technologies to take advantage of emerging opportunities in developed nomic status within the global system (Todd and Javalgi, 2007).

markets and create new markets in the global context ( Wang et al., SMEs’ role in the global and national economies, India’s

Recognizing

2020). Second, it illustrates the frameworks for collaboration between governments and development organizations have been keenly involved

SMEs, other organizations, and stakeholders, all of whom may have in creating SMEs (Sahi et al., 2020). BCT in the global network economy

various priorities but can find common ground through blockchain

Third, it clarifies BCT’s role in improving is becoming a crucial export driver in this context. SME e-commerce

networks (Chowdhury, 2018).

SMEs’ monitoring of and interaction systems dramatically minimize corporate acquisition costs and improve

with sustainability (Ilbiz and Durst, organizational operations productivity (Adomako et al., 2021). Cost

2019). Thus, this study advances a BCT-based 3S Triangle Model, which savings, convenience, and many custom choices continue to be the

was modified from the SCOPE framework and 5S Pentagon Model (Paul, driving factors for business-to-business and business-to-consumer

2020). The SCOPE framework is based on the 5S Pentagon Model, which e-commerce development for SMEs (see Table 1).

provides a holistic view of adoption drivers and challenges for busi - With the exponential growth of SMEs, individual SMEs may experi-

nesses of all sizes and industries. This paper discusses how SMEs can use

‘win-win’ ence dramatic changes such as increases in turnover or income, resulting

BCT to change corporate activities and generate results in the

how SMEs’ lack in decreased earnings and profits. Growth contributes to the challenge of

foreign market. We outline of current capacity can be SME management (Alaassar et al., 2021). Expanding an SME does not

improved at the corporate level, augmenting credibility and faith in just mean coping with the same challenges on a bigger scale; estab-

sustainability efforts in the global industry. While this study focuses on lishing and enhancing best processes are also often a core element of an

Indian SMEs, its applicability is broader. Indeed, two aspects of the SME’s growth. Indeed, a small company experiencing a powerful burst

methodological analysis may be replicable: First, this model may be of growth will see its activities changed in many ways. SMEs in India

extended to SMEs in other developed economies to discern if similar need to transform their business models to include BCT so that they

conclusions apply. Second, the results could guide other emerging ensure consistent success and long-term sustainability. Systems based on

economies in evaluating BCT-related problems that SMEs face in an era BCT will minimize costs and offer a convenient and straightforward way

of globalization and industry convergence.

The findings suggest that SMEs may expand their operations inter- to connect and transmit data globally (Upadhyay, 2020).

nationally by adapting BCT and collaborating with Amazon. This new 2.2. SCOPE framework

theoretical structure combines issues of marketing capabilities and the

influence of integrated business performance (Wang et al., 2019). This

Amazon’s

study is novel in its addition of a construct focusing on global Even though several models—such as the Uppsala model and

operations to the theoretical framework. Additionally, the findings RBV—have been widely employed in research, perspectives on them

indicate the rising role of networking and BCT in SME marketing vary. Practitioners and researchers argue that robust models are still

required. The “SCOPE” model framework (Paul,

behavior and identify a study vacuum in specific SME marketing prac- 2020) is proposed to

tices (Ilbiz and Durst, 2019). As a result of this vacuum, understanding of assist SME growth, conduct industry analyses for informed decisions,

how marketing competence is perceived and implemented in SMEs re- and develop strategies to compete in the global market. According to

mains unclear, and it continues to be a source of discussion among ac - this framework, SMEs should conduct an effective study before

Integrating SMEs’

ademics and practitioners (Dutta and Saini, 2021). expanding their global business operations. The SCOPE model postu-

performance in the worldwide market is required for internationaliza- lates tactics for SMEs to export, participate, and thrive in the world

tion, independent of the marketing method or theme. Furthermore, an market. The SCOPE model enables individuals to critically consider

SMEs’

in-depth examination of the role, organization, and management of growth and to better analyze their industries. This framework can

marketing capabilities in SMEs was conducted, using a widely recog- be generalized to other contexts, no matter the industry or country of

nized framework in the marketing literature that encompasses both origin, in both emerging and developed countrie s.

SMEs’

strategic and operational marketing processes and unique global

market approach. The findings provide valuable information about

evolving marketing behaviors and practices among SMEs, which help 2 Technovation 115 (2022) 102518

S. Rakshit et al. Table 1 (continued )

Table 1

Blockchain Technology (BCT) and global operations of SMEs in the business Primary topic Research Context Key References

research context. challenges for supply chain

Primary topic Research Context Key References management.

Creation of social capital via the Finds that market expectations Puthusserry

Adoption of blockchain among Examines the impact of Wong et al. stages of internationalization: drive the growth of social et al. (2019)

Malaysian SMEs in supply various criteria and regulatory (2020) Relationships between SMEs capital and

SMEs’

chain and operations support on adoption of from Britain and India internationalization.

management blockchain for operations and Dimensional impact on Examines entrepreneurial (Jin et al.,

supply chain management. internationalization and orientation and marketing 2018c)

Blockchain in operations Indicates that BCT may impact Lohmer & success of Korean SMEs’ potential as international size

management and diverse operations Lasch (2020) entrepreneurial orientation: and reach generators, which

manufacturing activities: management, industrial The mediating effect of are understudied despite their

Opportunity and hurdles processes, and business marketing capabilities importance to

models. internationalization efforts.

Logically develops an

Blockchain demystifying: A Upadhyay Exploring the effect of digital Examines how New Zealand Jin et al.

critical study of problems, interconnected structure for (2020) channels on the SMEs entering the Chinese (2018)

implementations, and integrating BCT in an internationalization of SMEs: market use digital platforms,

organization.

possibilities SMEs’

New Zealand use of the focusing on Alibaba.

Industrial blockchain-based Identifies blockchain-based Liu et al. Chinese business entry portal

product lifecycle applications in four new (2020) Alibaba

management system in product lifecycle phases: co-

Industry 4.0 design and co-creation,

accurate tracking and tracing, 2.3. Blockchain in SMEs

constructive maintenance, and

supervised recycling.

Blockchain-enabled execution Suggests the introduction of a Li et al. (2020) BCT has reduced lead time; reinforced transparency, reliability, and

framework for logistics blockchain-enabled logistics effectiveness in all market aspects; and has made international business

financing for capital- financing network as an more cost-effective and efficient (see Table 1). First implemented in

constrained retail e- automated e-commerce retail 2008, it is a public ledger maintained de-centrally as a single data record

commerce and logistics financing

approach. in blocks on network nodes (Wang, 2021; Zhang et al., 2021). Further,

BCT and startup funding: Cost- Describes how a BCT-based (Ahluwalia BCT is a distributed ledger system that uses a cryptographic architecture

economics of a transaction finance mechanism will et al., 2020b) to decentralize transaction record control (Javaid et al., 2021). Cryp-

perspective perception mitigate issues and contribute tographic components are used to communicate between nodes in a

to a more robust and peer-to-peer network that is geographically dispersed throughout the

decentralized entrepreneurial

financing method. world (Qiao et al., 2022). Several distinct users who do not know each

Industrial transformation Findings include generating (Po´lvora et al., other run a blockchain-based network without a need for a central au-

blockchain: A forward- and implementing blockchain 2020) Furthermore, BCT’s digital signature

thority (Javaid et al., 2021).

potential in specific European

looking roadmap to policy function suggests that to secure the validity and legitimacy of data

advice with multi- industrial and corporate

stakeholder involvement ecosystems, while considering transfers or transactions, a blockchain framework depends on pub- lic–

political, economic, social, private key encryption (Wang et al., 2022).

technological, legal, and

environmental concerns. 2.4. Digital online platforms for SMEs

Examines an appropriation

Blockchain appropriation for Ilbiz & Durst

Small and Midsize system under nine factors: cost (2019)

management, internalization,

Enterprises Digital online platforms, such as Amazon, deliver several e-com-

digital asset representation, merce variants, including business-to-business (B2B), business-to-

unchanging data recording, consumer (B2C), and even consumer-to-consumer (C2C) (Po´lvora

network scale, open and

coordinated ledger, et al., 2020b). Hundreds of thousands of SMEs, startups, and partners use

scalability, fair trade, and Amazon Web Services to launch and scale up their companies. Such

funding