Smaller Firms' Perceived Cost and Attractiveness in International Markets

Abstract

This study conceptualized and tested a research model about small and mediumsized enterprises' (SMEs') antecedents to perceived cost and attractiveness in international markets. Particularly, this study developed four hypotheses with regard to three important antecedents of SMEs' perceived cost and attractiveness: experiential knowledge, tangible resources configuration, and entrepreneurial tendencies. The structural equation modeling using a South Korean sample revealed that experiential knowledge has explanatory power in understanding the internationalization process of SMEs as well as that of bigger firms, and that, although perceived cost attenuates perceived attractiveness, entrepreneurship exerts its power in getting SMEs more attracted by the opportunities in foreign markets. However, in our sample, perception on the lack of tangible resources did not have a significant impact on perceived cost in foreign operations.