Navigating global waters: CEO’s legal literacy as a moderator of the SME’s internationalization process

Abstract

This study investigates how the CEO’s level of legal literacy influences the relationship between the CEO’s International Entrepreneurial Orientation (IEO) and the internationalization of SMEs, addressing a current research gap. Our findings, based on data from 209 Belgian SMEs reveal that the CEO’s level of legal literacy enhances the relationship between the CEO’s IEO and the SME’s internationalization (measured by the number of countries to which the firm exports its products or the firm’s export scope). This suggests that the CEO’s level of legal literacy can play a pivotal role in effectively translating the CEO's IEO, representing the CEO’s intentions to expand internationally into actual internationalization of the SME. This study contributes to the internationalization literature by empirically examining how the CEO's level of legal literacy benefits the process of turning the CEO’s international intentions into (more) SME internationalization, offering practical insights for SME CEOs and policymakers to prioritize and enhance CEOs’ level of legal literacy within the international entrepreneurial community.