Internationalization of Small High-Tech Firms: The Role of Information Technology

Abstract

SUMMARY This paper aims to address die relationship between two current phenomena in modern economy, namely the significant advances in Information and Communication Technology (ICT) and the increasing number of small international firms. Previous research on small international firms has identified recent advances in ICT as a trend that presumably facilitates the process of introducing products to international markets. However, little empirical work has been conducted to establish the dynamics behind this relationship. Pulling from a sample of 310 small Norwegian exporting manufacturers, this study investigates the role of ICT in small firm internationalization aiming to see whether ICT indeed plays a facilitating role in the internationalization process. We investigate three direct relationships between ICT and factors related to the international behavior of small firms (international expansion, competitive advantages, and managerial orientation). In order to understand the underlying dynamics, we also take a closer look at the interaction effects between these factors, the firm's international strategy, and ICT in a structural equation model. Findings from the study suggest that small firms with an international vision and strong international customer orientation adopt ICT solutions to realize their international intentions. Especially, high technology firms find ICT an effective business tool. On the performance side, this study finds evidence that ICT-intensive firms internationalize faster and more extensively than less ICT-intensive firms. It seems that ICT is important, making it possible for small, technology advanced firms with strong international visions to follow niche strategies in international markets. It is then, reason to conclude that ICT plays an important role in small firm internationalization–both as a channel for opportunity identification and as a powerful tool in the execution of an international strategy.