Internationalization stages of traditional SMEs: Increasing,decreasing and re-increasing commitment to foreign markets

SMEs attempt to accelerate and diversify their international expansion strategies. The purpose of this article is to identify the internationalization stages followed by traditional SMEs to seize global market opportunities. The authors analyze the internationalization paths of five French SMEs operating in traditional manufacturing industries. The empirical study is mainly based on 66 interviews. The findings indicate that the internationalization process of SMEs continues to follow several stages, but that their commitment to foreign markets may increase, decrease and re-increase. The identified stages, which can be triggered by internal and external factors, reflect characteristics of different internationalization models proposed in the literature.     

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.     

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.     

SME internationalization: How does the opportunity-based international entrepreneurial culture matter?

We employ the opportunity-based international entrepreneurial culture (IEC) comprehensive notion that draws upon the opportunity-based view (OBV). The OBV supports the idea that entrepreneurs mold the organizational behavior and characteristics of their firms to pursue opportunities abroad. We set out to explore possible attitudinal differences as regards exploitation of opportunities within firms in each of three internationalization dimensions that are previously identified in the literature, notably time to internationalization, country market presence and international mode. We perform eighteen case studies on high-performing internationalized small and medium-sized enterprises (SMEs) in knowledge intensive sectors. The evidence refines the OBV as it manifests how three IEC characteristics (namely risk attitude, market orientation and networking propensity) matter for firms in the three internationalization dimensions. The study further adds to the international entrepreneurship literature that has until now myopically focused on international new ventures as if they were the sole opportunity-driven group of internationalized SMEs.     

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 belt and road initiative,cultural friction and ethnicity: Their effects on the export performance of SMEs in China

China’s Belt and Road Initiative (BRI) has provided Chinese firms with significant incentives to speed up the pace of internationalization. Yet very little international business (IB) research has been found to empirically examine such policy effects. This study explores this important issue using Chinese firms of different ethnicities in the Xinjiang Uygur Autonomous Region (XUAR) of China. We propose that the BRI has a positive formal institutional effect on the export performance of XUAR firms that target the “Belt” countries. Both cultural friction and ethnicity serve as the unique cultural contingencies that moderate the relationship between the BRI and export performance. More specifically, the cultural friction that results from the process of internationalization will negatively affect the export performance prompted by the BRI. The Uygur-owned firms will benefit more from the BRI due to their cultural similarity. Overall, the study takes the lead in investigating both internal conditions and external environments that promote and inhibit the internationalization process of small-to-medium enterprises (SMEs) in the XUAR that are geographically close to the “Belt” countries. The findings help enrich the understanding of the dual “push” and “drag” effects on the outcomes of SMEs’ international activities due to the government-led initiatives and the understanding of micro-foundation toward internationalization from an ethnicity perspective.     

Innovation capacity,international experience and export performance of SMEs in Brazil

Innovation capacity and international experience are factors often related to the internationalisation process of firms, with export activities as the first stage of the process. However, firms from emerging countries seem to show advantages and follow patterns of international expansion that may differ from firms based in developed countries, where the internationalisation models were created. Specifically, exporting firms from emerging countries tend to have limited resources, especially small firms (e.g., for investing in R&D). Despite these facts, the literature on export performance seems biased towards recommending firms to enhance, above all, their innovation capacity in order to achieve better export performance, while little attention is paid to international experience as a factor that is as important as innovation. In this context, the objective of this study is to investigate the impact of innovation capacity and international experience on the export performance of small and medium-sized enterprises (SMEs) located in an emerging country and to identify which factor is more significant. The Resource-Based View and Dynamic Capabilities approach were used as theoretical frameworks. A research model was developed and tested on a significant sample of Brazilian industrial SMEs. The data were analysed through partial least squares structural equation modelling. The results indicate that international experience has a greater impact on export performance than innovation capacity, showing that there is possibility of overemphasising the role of innovation in the export performance of SMEs, at least, in the Brazilian context.     

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.     

Internationalization and performance of small- and medium-sized enterprises

In this paper, we examine the relationship between the degree of internationalization (DOI) and performance which represents a central issue in the international business literature. We argue that the substantial literature addressing this relationship is hampered by problematic measures for the key constructs (DOI and firm performance) and inconclusive results. Drawing from the internationalization process and location theories, we propose new measures for DOI (based on the dispersion of sales across geographic regions) and deploy a perceptual, multi-item measure of performance. Based on analyses of 94 survey responses provided by small- and medium-sized enterprises (SMEs) in Singapore, we find that that DOI positively impacts performance.     

Exploration of Chinese SMEs' export development: The role of managerial determinants based on an adapted innovation‐related internationalization model

Over the past two decades, small to medium‐sized enterprises (SMEs) in China have achieved rapid international development. Due to China's unique cultural and institutional environments, our understanding of the influence of managerial determinants on internationalization is still limited. This exploratory study takes the lens of the innovation model of internationalization to revisit the dynamic development of Chinese SMEs' export operations. Based on the four in‐depth case studies, the findings suggest that exports by Chinese SMEs are influenced by managerial perceptions such as negative country‐of‐origin effect and strict overseas quality standards. In addition, they show that both external and internal drivers act as “change agents” in their internationalization involvement. These findings will assist various stakeholders—government and export promotion agencies—to develop and deliver needs‐based supports and encourage nonexporters to participate in international operations.     

The drivers of the early internationalization of the firm

Time in firm internationalization has different dimensions: it might refer to the early start of international activities, the speed of international growth, or to its pace and rhythm. This contribution considers the first dimension mentioned, viz. precocity, and aims at understanding which variables determine an early international orientation. Building on a literature review, a theoretical framework is proposed in order to integrate a fragmented literature body. The framework is then tested through an analysis on a sample of 144 SMEs. Among the drivers of early internationalization the role of the previous experience of the entrepreneur, and especially of their international experience, frequently nurtured in internationally oriented family firms on one side or in multinational/foreign firms on the other one, was found significant. The positive association between precocity and niche positioning of the business enforces the relevance of entrepreneurship because focalization is a reflection of entrepreneurial orientation and strategic decisions.     

Knowledge and internationalization of returnee entrepreneurial firms

This study aims to answer whether and how returnee entrepreneurs’ international experience and returnee entrepreneurial firms’ international market knowledge influence these firms’ internationalization. Anchored in a framework combining an entrepreneurial and knowledge-based view, we develop a model and four hypotheses on the relations between returnee entrepreneurs’ international experience, international market knowledge, international market commitment, and level of internationalization of the returnee entrepreneurial firm. Empirical evidence of the proposed model is derived from a recent sample of Chinese returnee SMEs in knowledge-intensive and high-technology industries. The main finding is that returnee entrepreneurs’ international experience nurtures international market knowledge of returnee entrepreneurial firms, which in turn has a positive effect on these firms’ international market commitment and level of internationalization. In terms of theory, the study extends our understanding of returnee entrepreneurial firms by uncovering the role of returnee entrepreneurs’ international experience and returnee firms’ international market knowledge during their initial and early international expansion.     

International social SMEs in emerging countries: Do governments support their international growth?

Through an empirical research developed based on a sample of five international social SMEs in a Chinese city, this study examines the internationalization of social enterprises. Its purpose is to evaluate the role played by governments in supporting international growth. This is done using behavioural theory dimensions of prevalence, relevance, urgency, accessibility, and radicalness. From our analysis, local government supports the launch of social SMEs but this is limited to their growth stage. Entrepreneurial skills and external networks, thus, become crucial factors in the development of a new international business development model, encouraging further scholarly investigation.     

Structural and competitive determinants of globally oriented small- and medium-sized enterprises: An empirical analysis

This paper examines the factors influencing the internationalization of the activities of small- and medium-sized enterprises (SMEs) as an entrepreneurial response to the opportunities and threats posed by the increasing globalization of the economic system. Findings from agricultural equipment manufacturers indicate that size, international experience, innovation, and distinctiveness have a direct influence on the degree in internationalization by SMEs. Scanning, learning, and networking have some influence on the extent of internationalization of SME activities but only indirectly through other variables. Competition intensity and uncertainty also have an indirect impact on internationalization, but standardization does not. Relative importance of each determinant is ascertained and the impact of SME internationalization activities on performance is assessed.     

Internationalization and entrepreneurial orientation of family SMEs: The influence of the family character

Internationalization is an important entrepreneurial strategy for promoting the long-term growth and survivability of small and medium-sized enterprises (SMEs). Family involvement in top management teams (TMTs) can explain the heterogeneous behaviors of these firms’ international entrepreneurship process. This paper analyzes the moderating effects of the family’s influence on the relationship between entrepreneurial orientation and internationalization with two TMT diversities found only in family firms: the family TMT ratio and generational involvement. An analysis of 191 Spanish family SMEs indicated that entrepreneurial orientation plays a significant role in explaining the degree of internationalization in family firms and that a diversely formed TMT shapes this relationship. A high concentration of family members in managerial positions hinders the international entrepreneurship process. This fact highlights the importance of hiring non-family managers to promote internationalization. The results also reveal that involving multiple generations in decision-making hampers entrepreneurial internationalization, generating control and coordination problems.     

Internationalization and firm performance of SMEs: The moderating effects of CEO attributes

This paper examines the impact of CEO attributes on the internationalization–performance relationships of SMEs. Based on the upper echelons and information processing theories, we argue that CEOs play an important role in the internationalization of SMEs. Furthermore, some of the attributes of CEOs who have a greater information processing capability have positive moderating effects on the internationalization–performance relationship. Using panel data of 187 Taiwanese SMEs that expanded abroad, we find that age, educational level, international experience, and duality of the CEO have moderating effects on the relationship between internationalization and firm performance.     

A multidimensional perspective of SME internationalization speed: The influence of entrepreneurial characteristics

This paper contributes to a multidimensional perspective on the speed of SME internationalization. It examines the influence of entrepreneurial characteristics – experience, rationales and innovation strategies – on multiple dimensions of internationalization speed. Findings from a sample of 180 SMEs show that earliness, speed of deepening, and speed of geographic diversification can be viewed as three different strategic alternatives and that each dimension is predicted by a different set of entrepreneurial antecedents. Earliness of internationalization is associated with entrepreneurs’ international business experience and their perception of opportunities abroad as well as preference for an innovation strategy characterized by ambidextrous innovation. Speed of deepening is related to entrepreneurs’ international business experience, their orientation towards differentiation vis-à-vis competitors, and commitment to innovation and a strategy focusing on exploration. These results indicate the importance of distinguishing between different forms of innovation. Speed of geographic diversification is predicted only by entrepreneurs’ orientation towards differentiation vis-à-vis competitors.     

International SMEs from emerging markets—Insights from the Colombian textile and apparel industry

The internationalization of firms from emerging markets has been studied mainly from the perspective of large firms. Smaller and younger international firms based in emerging markets suffer from underrepresentation in the literature. This study sheds light on the internationalization of emerging market SMEs, focusing on Colombian textile and apparel exporters. Using mixed research methods, it illustrates the role of firm age in influencing internationalization strategy. It examines 1165 export contracts by 50 SMEs, discussing export intensity, speed, and geographic scope using recurrence analysis and cluster analysis. It contributes to international entrepreneurship by exploring new empirical evidence and examining it using a novel methodological approach.     

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.     

Post-entry internationalization speed of SMEs: The role of relational mechanisms and foreign market knowledge

Prior research shows that small and medium-sized enterprises (SMEs) can utilize domestic networks with internationally experienced partners to accelerate their internationalization process. Yet, there is a lack of clarity and limited empirical evidence regarding the role of relational mechanisms within these networks in driving post-entry internationalization speed (PIS) of SMEs. To address this gap, this study examines the relational mechanisms-PIS relationship by drawing insights from the relational view to argue that foreign market knowledge mediates the relationship between relational mechanisms and PIS. The hypothesized study model is tested using a structural equation modelling (SEM) technique on a sample of 394 UK based manufacturing SMEs. Our results show that foreign market knowledge acquisition from domestic networks fully mediates the relationship between relational mechanisms and PIS. Additionally, the linkage between foreign market knowledge acquisition and PIS is moderated by domestic environmental hostility, such that the relationship is strengthened when domestic environmental hostility increases. We discuss the contributions and implications of our results and suggest opportunities for future research.