Internationalization of Small Firms

Abstract

Literature from export development and international entrepreneurship argues that personal factors, or the owner/founder's human capital, strongly influence the choice and degree of internationalization in small firms. Personal factors include a wide array of dimensions, including achieved attributes, environmental perceptions and business skills, yet most studies bundle these dimensions with other internationalization factors. Consequently, the relative importance of human capital factors in internationalization is unclear. This article examines the differences in personal factors between internationalized and non-internationalized small firms. We compare the relative importance of four dimensions of human capital: international business skills, international orientation, perceptions of the environment, and demographic characteristics, and analyze these based on the industrial technology sector (i.e. primary, secondary and tertiary). Results show that neither traditional demographic measures nor international orientation distinguishes between internationalized and non-internationalized firms, but that environmental perceptions and selfassessed strengths in international business skills are significant. The combination of personal factors varies significantly by technology sector, with the primary and tertiary sectors showing minimal differences except in perceptions of the environment. International business skills, international orientation and perceptions of the environment differ for small firms in the secondary sector. Implications and future research directions are included.