The Proactive Initiation of SMEs’ Foreign Business Relationships

Abstract

Taking control over one's destiny by proactive internationalization has been considered an important performance indicator in small business research. We develop a model that examines how internal and external contextual factors influence SMEs’ foreign market entry through proactive initiation of business relationships in foreign markets. The ability to proactively leverage such relationships is essential for opening up avenues into foreign markets and serves as a first step in negating the liability of outsidership that could prohibit firms from acquiring relevant market‐specific resources. By examining the dynamics that either can enable or constrain firms in their efforts to become insiders in foreign markets in the entry phase, we contribute to international small business theory. We also add conceptual and practical insights to international small business research by providing valuable empirical verification of how and to what extent the proactive initiation of foreign business relationships of SMEs is internally or externally conditioned.