National Internationalization Processes: SME on the way to Eastern Europe

Abstract

Going alone on an adventure tour can be hazardous. Good friends help, if only through their advice. The same holds true for small businesses aiming for major international markets. They rely on information, support services and networks that are jointly built up with business partners. Business communities therefore follow a joint path of gradual internationalization that resembles the internationalization of firms described by Uppsala scholars. We present a model that integrates business networks with the internationalization process model to explain international business of small and medium size enterprises (SME). While global multinationals may be able to tap into several clusters and networks, SMEs are to a large extent part of the internationalization process of their national economy. Our survey evidence points to differences in the home country environment that explain why Danish firms, relative to Austrian firms, are less active. Our case evidence sheds more light on the dynamics of entry, as events in the network, and expansion of the network, motivate increased increased commitment.