A vicarious learning perspective on the relationship between home-peer performance and export intensity among SMEs

Abstract

PurposeHome-peer firms (i.e. firms from the same industry and country) noticeably influence the internationalization behavior of small-to-medium-sized enterprises (SMEs). Drawing from vicarious learning literature, the authors theorize how home-peer firms' success in export markets affects SMEs' export intensity into those markets.Design/methodology/approachThe authors test the hypotheses on a sample of 32,108 Canadian SME exporters. A Tobit model was used to examine the effect of home-peer performance and its interactions with firm age, export experience, and geographic and institutional distance on export entry intensity.FindingsThe authors find that SMEs are more likely to enter export markets with higher intensity if home-peer firms perform well in those markets. This home-peer influence is stronger when the SME lacks export experience, when the home-peer information is more recent, and when environmental uncertainty is high.Originality/valueThe study is among the first to show empirically that the performance of home-peers positively influences the export intensity of SMEs in international markets, suggesting that SMEs use this measure to inform their internationalization strategies.