What drives business performance of small and medium-sized enterprises in cross-border electronic commerce?

In cross-border e-commerce, electronic retailers (e-retailers) aim to extend their sales activities via the Internet beyond national borders. Unlike large companies, small and medium-sized enterprises are struggling with their international online expansion.

This phenomenon is not limited to countries with a developed e-commerce market; e-retailers from emerging e-commerce markets, too, face the problem. This study investigates what the drivers are of business performance of SMEs in cross-border e-retailing, and how drivers differ between developed and emerging e-commerce markets in Europe.

Structural equation modelling analyses with the lavaan package in R on a sample of 453 owners and directors of SMEs from 20 countries, show that foreign market orientation not only directly influences business performance in cross-border e-commerce, but also indirectly through communication efforts in foreign markets.

These results hold for both developed and emerging markets, however, there are two interesting differences. First in the influence of foreign market orientation and communication efforts on business performance, and second in the impact of the number of years the electronic e-retailer is active in cross-border e-commerce.