This research analyses the challenges facing SMEs in Oman in their quest for internationalization. The study is based on the OECD Model of Internationalization put forward in the report titled ―How to Foster the Internationalization of SMEs through the Pacific Alliance Integration Process‖ which focuses on four factors namely finance, business environment, firm capabilities and market access, which are appropriate for an emerging economy like Oman. This study used a descriptive and quantitative research design in attempting to analyze the challenges being faced by Omani SMEs in their endeavors to internationalize. The research investigates causal relationship between variables using positivist and deductive approach. Data collected from 102 respondents was analysed by Structural Equation Modeling(SEM) using AMOS. It was found that finance availability was the most significant predictor of internationalization challenges followed by market access and business environment, while firm capabilities had no impact. Thus SMEs need easier access to credit and have to develop their international business networks and their marketing capabilities in order to grow internationally. Keeping in mind the contribution made by SMEs the government has to intervene by opening up easy lines of credit to SME exporters and allowing them relaxations in customs and other duties.

This research analyses the challenges facing SMEs in Oman in their quest for internationalization. The study is based on the OECD Model of Internationalization put forward in the report titled ―How to Foster the Internationalization of SMEs through the Pacific Alliance Integration Process‖ which f...