Barriers for Sri Lankan IT Businesses to Expand in Foreign Countries

Sri Lankan IT companies need to expand into foreign markets to ensure their long-term success and growth. However, entrepreneurs and professionals face significant barriers that hinder efforts to expand firms abroad. This quantitative empirical study identified key barriers to expansion by conducting a literature review and surveying the responses of 136 IT industry experts in Sri Lanka. The conceptual framework included five types of barriers: social and cultural, organizational management, economic, market-related, and legal and political. Questionnaire data was analyzed through PLS-SEM modelling to test the moderating effect of firm size. Results revealed that legal and political issues and intense competition pose major concerns. The moderation effect of organization size proved statistically insignificant. By overcoming critical barriers like policy uncertainty, unfair competition, and cultural unfamiliarity, companies can unlock more growth opportunities overseas. As the IT industry remains central to Sri Lanka’s economic growth, tackling barriers to entrepreneurship is critical. This research provides key insights on challenges for international expansion that IT professionals face, with actionable implications for business leaders and policymakers seeking to bolster the overseas success of local IT firms. Focused governmental efforts to ease market entry could create a better climate for global expansion. Supporting the international competitiveness of this vital sector would further improve Sri Lanka’s economy.