This study examines how low-technology entrepreneurial ventures internationalise within buyer-driven global value chains characterised by governance asymmetry. It develops a governance-conditioned explanation of how dynamic capabilities are enacted in resource-constrained contexts.
The study adopts a qualitative multiple-case design based on twelve exporting entrepreneurial ventures (SMEs) located in India's Moradabad handicraft cluster. Data were collected through semi-structured interviews, site observations, and documentary analysis and analysed using an abductive, process-oriented approach.
The findings show that sensing, seizing and transforming are enacted through externally structured scaffolding rather than purely internal orchestration. Lead buyers, buying agencies, trade fairs, and compliance regimes filter market signals, codify standards and condition adaptive routines. Externally scaffolded capability enactment produces divergent trajectories: under diversified governance configurations, it enhances adaptive capacity and export continuity; under concentrated buyer power and exclusivity, it reinforces relational dependence and capability lock-in. Importantly, capability development may occur without a corresponding increase in strategic autonomy, revealing a governance-conditioned form of adaptation in which learning and dependence co-exist.
The study introduces the concept of externally scaffolded dynamic capabilities and integrates dynamic capabilities theory with global value chain governance. It advances a governance-conditioned account of entrepreneurial venture internationalisation in low-technology, buyer-driven contexts and challenges firm-centric interpretations of capability development.
