What drives SME export intensity in transition economies? The role of infrastructure, digitalisation and innovation capabilities

The role of macro-level factors has been identified as pivotal to firm performance. Yet, there is little focus on how home-country infrastructure influences the export performance of small and medium-sized enterprises (SMEs) in transition countries. This paper addresses this concern by arguing that the relevance of home-country infrastructure on SME export intensity depends on the dynamic interactions of enterprise capabilities. We empirically test this assertion with a sample of 8048 SMEs from 16 transition economies. Using the Structural equation modelling technique, we find that home-country infrastructure does not promote SME export intensity. Additionally, we find that home-country infrastructure dampens the digitalisation of export-oriented SMEs. Moreover, we provide evidence suggesting that SMEs can benefit from digitalisation by leveraging innovation capabilities in their export strategies. The findings of this study strongly indicate that policy actions targeting infrastructure improvement in transition economies will enhance SME capabilities and export performance. • The study examines the impact of home-country infrastructure on the export intensity of SMEs in 16 transition economies. • It analyses the interactions of infrastructure, digitalisation, and innovation capabilities, identifying the conditions under which these factors are most relevant in facilitating the export success of SMEs. • The findings reveal that SMEs in transition economies can enhance their export performance by leveraging digitalisation and innovation capabilities. • The study indicates that policies targeting infrastructure improvement in transition economies are essential for promoting SME capabilities and export performance.