Exploring the influence of the national institutional environment on SME exporters: comparative evidence from Tajikistan and the Kyrgyz Republic

This chapter explores how the internationalization of indigenous SMEs from transition economies is influenced by the national (i.e., home country) institutional environment. Our study employs a comparative case study design and is based on original qualitative field research interviews with small business owners/managers and “expert informants” in two “less-developed” transition economies in Central Asia: Tajikistan and the Kyrgyz Republic. Our evidence unveils and illustrates how the formal institutional environment (defined as a combination of formal rules, laws, regulations and government policies) influences the export behavior and performance of indigenous SMEs in the cotton sector. We find that businesses in both countries are affected by certain formal institutions, and provide several illustrations of this. However, comparative analysis of the Tajik and Kyrgyz cases also points to some interesting contrasts between the two countries, which we attribute to the particular nature, pace and extent of the transition process in each country.