Rapid internationalization of traditional SMEs: Between gradualist models and born globals

Within the last 20 years, a number of traditional small-medium enterprises (SMEs) have accelerated their international commitment by investing in distant countries despite limited market knowledge, limited use of networks, and limited international experience of the entrepreneurs. The purpose of this paper is to draw research attention to this phenomenon and to compliment the existing literature on internationalization process of SMEs.We argue that traditional SMEs are able to speed up their internationalization process by, thus, rapidly catching up with the increasing global competition. The peculiar path followed by SMEs is described by analyzing five case firms and explained by contrasting to the leading literature. The empirical evidence suggests that specific strategic focus (as opposed to knowledge-intensity, international network, and international experience) is the determinant success aspect of the change in the internationalization process.     

Entrepreneurial orientation,social capital,and the internationalization of SMES: Evidence from China

This article combines arguments from entrepreneurship literature and social capital theory to examine the antecedents to the internationalization of small and medium‐sized enterprises (SMEs) from China. Our quantitative study of 117 Chinese SMEs demonstrates the overall importance of entrepreneurial orientation and social capital of entrepreneurs in facilitating their internationalization efforts, and also reveals that different dimensions of entrepreneurial orientation and different types of social capital exert different levels of independent influence on Chinese SMEs' internationalization. Complementary data from multiple case studies explains the variation between our quantitative findings and the findings of previous research. By highlighting the value of the entrepreneurial attributes of Chinese SMEs and the social capital embedded in their networks in the pursuit of their internationalization, the article adds to the scant literature on the internationalization behavior of the rapidly emerging Chinese SMEs. © 2012 Wiley Periodicals, Inc.     

Strategic decision-making processes,international environmental munificence and the accelerated internationalization of SMEs

Motivated by the paucity of studies examining the effects of strategic decision-making processes on accelerated internationalization, this study draws on the organizational information processing theory and the resource-based view of the firm to argue that procedural rationality and politicization have a negative effect on accelerated internationalization of SMEs. Using a sample of 176 internationalized Greek SMEs, the study finds that the procedural rationality and politicization of SMEs reduce the probability of accelerated internationalization. These relationships are more pronounced in munificent international environments, indicating that when accelerated internationalization is constrained by strategic decision-making processes, SMEs may miss opportunities in attractive international markets. The study contributes to the organizational information processing theory, to the literature on the speed of decisionmaking in SMEs, and to the literature on accelerated SME internationalization.     

Networking and internationalization of SMEs in emerging economies

Networking has been established as an important source of small- to medium-sized enterprises (SMEs) business expansion in many developed economies. Often, it provides the necessary intelligence leading to internationalization. The question this study addresses is “What are the roles and sources of networking of SMEs internationalization in emerging economies?” This study responds to this query through a dyadic study involving expert-opinion survey of SME development professionals and case studies of SMEs internationalization. The convergent views identified three interconnected sources of networking for SMEs internationalization, which are government institutions, business associates, and personal relations. The results affirmed that accomplishment of internationalization requires cohesion among the myriads of networking sources and operating agencies. A systems approach towards supporting the creation and management of networking linkages for internationalization combines systems thinking perspective with institutional view. It emphasizes integration of coordination, facilitation, and monitoring functions. Thus, suggesting institutional support and systems thinking are important constructs in the theory of international entrepreneurship. Policy makers and entrepreneurs of SMEs gain actionable points to ensure effectiveness of institutional support mechanism and to enhance their business internationalization, respectively.     

Domestic competitor influence on internationalizing SMEs as an industry evolves

Taking an industry-level perspective of how SME internationalization is shaped by interaction with domestic competitors, and by researching the whole population of internationalizing firms in the same industry segment in the same country over time, the paper uses industry evolution and reference competitor theories to explain SME internationalization as a response to changing market and industry context. Three competitive patterns are predicted, and examined empirically, for SMEs internationalizing in the emergence, growth and consolidation stages of an industry’s evolution. Pioneering internationalizing SMEs act as reference competitors for firms subsequently entering the industry, thereby influencing the industry evolution domestically and globally.     

Beyond learning by experience: The use of alternative learning processes by incrementally and rapidly internationalizing SMEs

How firms learn about foreign markets and internationalization processes is an important theme in the literature on SME internationalization, evidenced by the Uppsala model’s emphasis on experiential learning as an explanation for incremental internationalization, and attempts to explain how early and rapid internationalization can be facilitated by alternative modes of learning, especially congenital learning. Yet, the learning processes used, and the content and source of learning, have not been compared systematically, especially with respect to how these evolve as firms become increasingly internationalized. This paper reports the findings of a retrospective longitudinal analysis of the learning processes, sources and foci of four New Zealand-based SMEs that internationalized incrementally, and four that internationalized rapidly. The findings demonstrate that while experiential learning is important, both incrementally and rapidly internationalizing firms use other learning modes at different stages of their internationalization, and that there are differences in the content and source of learning. Thus, the relationship between internationalization and learning processes may be more complex than the literature currently suggests, inviting further exploration of the multiple ways that SMEs learn, and the contingent factors that might influence this.     

Entrepreneurial orientation, management commitment, and human capital: The internationalization of SMEs in India

Small- and medium-sized enterprises (SMEs) make sizeable contributions to the economic success of nations. Research concerning the internationalization of SMEs is available in the context of developed economies but less is can be found dealing specifically with the entrepreneurial behavior and international expansion of SMEs in emerging markets such as India. This research extends the literature addressing the relationships surrounding the internationalization of SMEs in India as related to entrepreneurial behavior, firm resources, and commitment to internationalization. Entrepreneurial orientation, a commitment to internationalization, and the ability to leverage human capital influence the international success of Indian SMEs, based on the analysis of data collected from 150 Indian SMEs.     

The Internet and Internationalization of Smaller Manufacturing Enterprises

Abstract

One of the most frequently discussed topics in the current international business literature is the impact of the Internet on the internationalization of smaller manufacturing enterprises (SMEs). The study was carried out through a mail survey of the top executives of 125 Wisconsin firms. It examined 10 research hypotheses on internal and external factors which had been identified by previous research to influence the internationalization of SMEs through the Internet. Research findings conclude that the scope of internationalization of SMEs through the Internet is affected by internal factors, such as managements' perceptions of the effectiveness of their web sites as a marketing tool, lack of experience, and SMEs' potential usage of the Internet.     

The impact of board of directors’ characteristics on the internationalization of family SMEs

Family small and medium-sized enterprises (SMEs) face both general bounded rationality challenges and a unique expression of bounded rationality in their internationalization process: the bifurcation bias, a concept aligned with modern transaction cost theory (TCT). We argue that efficient governance in family SMEs, and especially features of the Board of Directors’ composition, can help alleviate bounded rationality. Complementing TCT with upper echelons theory (UET), we investigate which Board characteristics in family SMEs contribute to efficient governance and the ensuing strategy decisions. We focus specifically on strategy decisions in the internationalization sphere. Our empirical analysis of survey data from 328 Belgian family SMEs, operating out of a small open economy, reveals that family SMEs internationalize more if their Boards are ‘open’, ‘inclusive’, ‘experienced’ and ‘active’. These Board characteristics, all reflective of efficient governance, i.e., providing the Board with the capacity to alleviate bounded rationality constraints, positively contribute to internationalization, especially (and perhaps paradoxically) when the family SME is managed by a CEO who is also a family member.     

Developing Absorptive Capacity through e‐Business: The Case of International SMEs

This research uses the absorptive capacity concept as a theoretical lens to study the effect of e‐business upon the internationalization performance of small and medium‐sized enterprises (SMEs), addressing the following research issue: To what extent are manufacturing SMEs successful in developing their potential and realized absorptive capacity in response to the environmental uncertainty brought about by their internationalization? Results of a survey study of 588 manufacturing SMEs indicate that e‐business capabilities have a significant impact on internationalization performance to the extent that these capabilities are developed as a response to increased environmental uncertainty. Moreover, these capabilities are realized through the development of networking, advanced manufacturing, and marketing capabilities that also respond to environmental uncertainty.     

Tie the Ties: The Significance of the Binding Networks in SMEs’ Internationalization Process

This research examines the obstacles for small and medium sized enterprises’ (SMEs) internationalization and the roles of networks in SMEs’ internationalization process. It finds that the key obstacles for SMEs internationalization are lack of market insights, lack of knowledge and skills necessary for internationalization, and lack of skilled labor. In Thailand, personal networking has played the most prominent role in the early stage of SMEs’ internationalization. Trust is reported to be the critical component for a long lasting relationship in the network. “Friendship” is viewed as the ultimate level of relationship in the trusted network.     

The effect of network competence and environmental hostility on the internationalization of SMEs

Research findings suggest that networks offer small and medium-sized enterprises (SMEs) opportunities to internationalize successfully. However, the role of internal organizational competence in the process of developing and maintaining such networks in hostile external environments has received little attention. The aim of this study is to shed light on the relationship by examining the positive influence that the network competence of SMEs has on their propensity to internationalize, and on their subsequent international performance. Given that the willingness of firms to enter and perform well in markets appears to also depend on environmental hostilities, this external influence on SME internationalization is incorporated into the study. We also examine whether the level of environmental hostility moderates the relationship between network competence and SME internationalization. The empirical part of the study comprises a web survey of 298 Finnish SMEs representing five different industry sectors: metal, food, furniture, software, and knowledge-intensive business services. Confirmatory factor analysis and regression models are used in the analysis. The results indicate that higher levels of network competence are positively related to the propensity of SMEs to internationalize, as well as to their international performance. Conversely, the level of environmental hostility has a negative effect on the performance measure, but not on the internationalization propensity. Additionally, the influence of network competence is not moderated by environmental hostility. The results indicate that internal network competence and external environmental hostility play a role in SME internationalization, and that the positive influence of network competence exists independently of the hostility in the environment.     

Constraints,internationalization and growth: A cross-country analysis of European SMEs

Small and medium sized enterprises (SMEs) are known to face barriers which limit their ability to grow. We build on resource dependency theory and the resource-based view to investigate how SMEs are able to achieve venture growth in the face of these constraints by adopting internationalization and inter-firm collaboration strategies. Based on a large sample of European SMEs, our research demonstrates the importance of distinguishing between specific dimensions of internationalization and inter-firm collaborations, in particular between exporting and importing, and between formal and informal collaborations – as well as context-specificity of these strategies with respect to the types of constraints SMEs face.     

U.K. SMEs’ awareness,use, and perceptions of selected government export assistance programs: An investigation into the effect of the internationalization process

This study reports on an empirical investigation into U.K. managers’ behavior toward and perceptions about selected export assistance programs. Specifically, it investigates whether differences exist between managers of U.K. small and medium-sized enterprises (SMEs) in various stages of internationalization in relation to their awareness and frequency of use of the programs, together with their perceptions about the timeliness, reliability, and availability of the assistance schemes. It provides a contribution to the knowledge in the areas of export management and public policy because despite the fact that a body of literature exists on the topics of both export assistance and the internationalization process of firms, there is a need to bring these two research topics together in the form of a single U.K. study to establish whether current export assistance procedures are suitable for managers from firms in different stages of export development. The rationale for such a study is that if managers of U.K. SMEs in different stages of the internationalization process differ in both their behavior toward and perceptions about government assistance programs, U.K. policymakers may need to reconsider the way in which services are provided to avoid wasting scarce resources.     

External managers,family ownership and the scope of SME internationalization

SMEs are important to world business and the majority of SMEs are family firms. Yet some family SMEs are inert, local firms while others are dynamic and international. Do certain governance structures encourage the scale and scope of their internationalization? We jointly apply social capital and corporate governance theories to explain the scope of family SMEs internationalization, and find that professional managers externally recruited from outside the family are important, but only for lower levels of family ownership, suggesting synergistic combinations of ownership and management. It is the combination of external capital with external managers that really works.     

Perceived resource deficiency and internationalization of small- and medium-sized firms

It is documented in the literature that resource deficiency constitutes a barrier to firms’ internationalization. However, small- and medium-sized firms' (SMEs) perceptual barriers to internationalization have received little attention. By highlighting the importance of managerial perceptions in strategic decisions and integrating the resource-based view and the technology acceptance model, this study examines the role of perceived resource deficiency in SMEs’ internationalization. The major finding of this study suggests that perceived resource deficiency in knowledge-based resources constitutes a major perceptual barrier to SMEs’ internationalization. Particularly, perceived resource deficiency in knowledge-based resources has more negative impact on internationalization than does that in other firm-specific resources.     

Application of human resource management's universal model: An examination of people versus institutions as barriers of internationalization for SMEs in a small developing country

Although the importance of people and institutions has been highlighted in multinational enterprise studies, the association between people, institutions, and the internationalization of small to medium‐sized enterprise (SMEs) is an underexplored issue from the context of a small developing country. We examine theories subsumed under the Universal Model of human resource management (HRM) onto SMEs to study the hypothesized people and institutionally orientated barriers posed to SMEs’ internationalization. Using quantitative analysis, the impacts of the barriers on internationalization are highlighted with particular attention to employer attractiveness. Following extant literature review, this study has used primary data collected through questionnaires from 212 Bangladeshi SMEs. We developed and validated the partial least square‐based structural equation model (PLS‐SEM) to assess the impacts and successfully framed people versus institutional barriers as a second‐order hierarchical reflective model, which has not been done previously. Given their marginal significance over institutions, people‐oriented cultural barriers should be included as an extension of the Universal Model to study SME internationalization.     

我国中小企业外向国际化发展的探讨

相对大企业而言,我国中小企业外向国际化更加重要。中小企业外向国际化理论有两类,即渐进国际化理论和快速国际化理论,两类理论具有互补性,共同解释中小企业外向国际化现象。近年来,我国中小企业外向国际化有了一定的发展,但在政策环境、资金、技术、人才等方面仍存在一些问题,需要研究与解决。     

The Impact of CEO Characteristics on the Internationalization of SMEs: Evidence from the UK

This study analyses the role of chief executive officers (CEOs) in the internationalization of small‐ and medium‐sized enterprises (SMEs). Specifically, it examines the impact of CEOs' demographic characteristics on the internationalization of SMEs. Based on upper echelons theory, resource‐based view and information processing theory, it is hypothesized that CEO characteristics like age, education, tenure, and political connectedness affect SMEs' international performance. Using the panel data analysis of 283 UK SMEs for the period of 2005 to 2015, this study provides evidence that CEOs' political connections and educational level are positively related to firm internationalization, while age negatively influences firm internationalization. Tenure is found to have a curvilinear relationship with SMEs' internationalization. Copyright © 2018 ASAC. Published by John Wiley & Sons, Ltd.     

What drives the internationalization of Chinese SMEs? The joint effects of international entrepreneurship characteristics,network ties,and firm ownership

The paper first investigates how Chinese small-to-medium enterprises’ (SMEs) network ties at home moderate the relationships between different international entrepreneurship (IE) characteristics and the degree of internationalization of the firm. The paper further explores how the Chinese SMEs’ ownership arrangement might explain the boundary conditions of the proposed moderating effects of network ties on the relationship between IE characteristics and internationalization. Findings of our empirical study generally support the hypotheses derived from our theoretical framework. The paper offers new insights into the internationalization of Chinese SMEs by ascertaining the differential contingent value of business versus political ties in the relationship between IE characteristics and internationalization and explores the bounds of our findings in terms of the ownership arrangement unique to the Chinese context.