Toward a deeper understanding of the roles of personal and business networks and market knowledge in SMEs’ international performance

Abstract

Purpose– The purpose of this paper is to, built upon Johanson and Vahlne’s (2009) Business Network Internationalization Process Model, explore the role of personal networks and business networks and their impact on foreign market knowledge and performance among small and medium-sized enterprises (SMEs) after international market entry.Design/methodology/approach– With a total mailing list of 2,250 US firms, data were collected via a mail survey in accordance with the methods of Dillmanet al.(2008).Findings– An empirical analysis of 105 SME cases revealed that business networks increased foreign market knowledge, which in turn also heightened the international performance of the SMEs. This confirmed the mediating role of market knowledge between business networks and international performance. Personal networks, however, provided little support in helping SMEs achieve foreign market knowledge and international performance.Originality/value– This study contributes unique empirical evidence demonstrating that business network internationalization models can be applicable to the context of SMEs; that is, having access to such a network (i.e. a business network) is found to be a critical factor of international performance.