The effect of international experience on the degree of SME insidership in newly opened business networks

Abstract

Purpose – The purpose of this study is to develop internationalization process theory by examining the relationship between small- and medium-sized enterprises (SMEs) international experience and their degree of insidership in newly opened business networks. Design/methodology/approach – The study applies a quantitative approach. Data were collected on-site at 203 SMEs having entered the Baltic States, Poland, Russia and China. The data are analysed with structural equation modeling in SmartPLS. Findings – The paper reveals that international experience is positively associated with both the country and customer experience in the newly opened business network. Country experience, in turn, is strongly associated with a firm's degree of insidership in the business network. Conflicting with the hypothesized model, no support is found for the direct relationship between international experience and insidership. Nor does the analysis reveal any significant relationship between a firm's customer experience, in terms of variation, in the newly opened business network and the degree of insidership in the network. Research limitations/implications – The paper empirically discriminates different types of international experience derived from theory and examines their relationship with the degree of firm insidership in newly opened business networks. Originality/value – Theoretically this paper advances internationalization process theory by developing its network aspect as well as discriminating different experience types and their role in predicting network insidership in newly opened business networks.