The belt and road initiative: a study on Malaysian small and medium enterprises’ motives for internationalization

Abstract

The Chinese President Xi Jinping announced a massive plan named the Belt and Road Initiative (BRI) in 2013. This plan involves 60 percent of the world's population and 30 percent of world's GDP. The main objective of the BRI is to encourage the participating countries to improve investment and trade facilitation via the development of infrastructure. In line with the objective of BRI, Chinese enterprises collectively invested USD4.67 billion in non-financial direct investment in fifty-three countries, including Malaysia, during the first quarter of 2018. This study aims to examine the motives of Malaysian Small and Medium Enterprises (SMEs) in internationalizing their business ventures in the Chinese market. In total, five different dimensions of motives were examined, namely; Market-seeking Motives, Resource Seeking Motives, Efficiency-seeking Motives, Network-seeking Motives, and Strategic Resource Seeking Motives. A quantitative study was carried out, where a person-administered survey was undertaken in Malaysia among selected SMEs using judgmental sampling. The results of the analysis indicated that amongst the five dimensions of motives studied, that the respondents showed a greater appreciation for Network-seeking Motives, as the majority of the respondents agreed on all of the relevant measurement items for this dimension. The implications of the study to both policymakers and market practitioners have been discussed in this article, and lastly, the known limitations of the research limitations, as well as recommendations for future study, have been detailed.