Firm Size and the Nature of International Relationships: The Case of Globally Integrated Small Firms

Abstract

During the past quarter of a century or so there was a marked increase in the number of studies exploring the internationalization of the small firm. The basic premise of this body of literature was that the size of the firm mattered in the process of internationalization. Research in this area focused heavily on types of forward integration (particularly exporting), and examined a handful of key research questions: which national markets shall a small firm enter, how, and when, as well as the impact of internationalization on business performance. Rather unexpectedly, to date there have been no studies exploring the impact of firm size on the nature of relationships created by small firms. This paper aspires to address this gap in the literature by focusing upon globally integrated small enterprises. Drawing on the evidence of 755 firms in five EU countries the paper argues that there are no profound differences in the nature of international relationships created by globally integrated small firms in comparison to their large‐scale counterparts. More importantly, however, the paper suggests that power asymmetry and mutuality may coexist in international relationship, and small firms may often occupy positions of power in global commodity chains.