The purpose of this study is to examine the impact of cultural intelligence, service capabilities and differentiation advantage on firm financial success within the context of emerging market professional service small and medium-sized enterprises (PSF SMEs).
The sample comprised 251 respondents who were CEOs or managers of internationally operating PSF SMEs from a key emerging market – India. Relationships were examined using structural equation modeling of survey data.
Results show how cultural intelligence and firm internal capabilities are key for firm financial success. Specifically, top managers’ cultural intelligence positively impacts the PSF SME’s service capabilities and differentiation advantage; service capabilities and differentiation advantage mediate the relationship between cultural intelligence and financial performance and the PSF SME’s service capabilities positively impact differentiation advantage with both factors also positively affecting financial success.
The novelty of this study is that the authors are empirically examining concepts that have been neglected in prior research; specifically, the authors are examining cultural intelligence as a driver of important PSF factors in the Indian emerging market SME context. This study’s findings have important theoretical and managerial implications for PSF SMEs. This study addresses calls for more research into the important, yet relatively understudied, area of emerging market PSF SMEs.
