Small and medium-sized enterprises in emerging markets and foreign direct investment: an integrated multi-criteria decision-making approach

Farhan Muhammad Muneeb, Amir Karbassi Yazdi, Thomas Hanne and Arkadiusz Mironko

Applied Economics, 2025, vol. 57, issue 25, 3327-3344

Abstract: This study examines the impact of critical success factors (CSFs) on small and medium-sized enterprises (SMEs). We propose a strategic roadmap for early internationalization strategies to promote foreign direct investment (FDI). Based on the resource-based view (RBV), this research work aims to understand the CSFs that can drive early internationalization within the setting of SMEs, especially in the textile industry of emerging markets. Based on an extensive state-of-the-art literature review we identify relevant CSFs. The set of CSFs is then evaluated using interviews with nine experts and further analysed through multi-criteria decision-making (MCDM) methods, the step-wise weight assessment ratio analysis (SWARA), the additive ratio assessment method (ARAS), and grey relational analysis (GRA) by using Lingo V.18 and MATLAB. Our empirical findings reveal a set of 15 significant CSFs among 28, emphasizing entrepreneurial process, finance, and corporate venturing. In addition, our results underline that it is vital to employ the identified CSFs for SMEs in advancing early internationalization strategies during the COVID-19 pandemic. This study provided significant policy implications for Pakistani SMEs’ by unfolding the suggested CSFs to foster economic development.

Date: 2025
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DOI: 10.1080/00036846.2024.2337777

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