Internationalization Of Small Firms Research Articles

Effectual market creation in the cross-border e-commerce of small-and medium-sized enterprises

Cross-border e-commerce can enable smaller firms to quickly reach many foreign markets. This article examines how effectual market creation affects the international performance of small and medium-sized enterprises (SMEs) engaged in cross-border e-commerce. Building upon effectuation theory, we suggest that firms can drive foreign market demand by creating new ways to interact and engage with customers in the digital space. Analysing a sample of 99 Swedish e-commerce SMEs, we find that effectual market creation has a positive effect on their international performance. We also find that this positive effect is enabled by insidership in international markets, illustrated by activities related to international marketing analytics and international networking. Through these findings, we contribute to theory development on the internationalisation of small digital firms.

Influences of Foreign and Domestic Venture Capitalists on Internationalisation of Small Firms

This study investigates whether venture capitalists (VCs) influence the internationalization of small firms and whether such impact differs between foreign and domestic VCs. Our findings, based on in-depth interviews with top decision-makers from two VCs and four portfolio ventures, indicate contrasts between the perceptions of VCs and portfolio firms, so that the former claim to have a higher impact than what is perceived by the latter. Additionally, our evidence about the differential impacts of foreign versus domestic VCs runs counter to the literature and suggests that the purported stronger impact of foreign VCs may have been over-emphasized in the literature. Two contingencies are revealed that seem to affect the impact of the VC and of its nationality on the internationalization of investee firms: breadth of the industry (global versus local industries) and firm’s vocation (born global firm versus local leader).

A network perspective on foreign entry modes of small knowledge-intensive services firms

PurposeIntegrating network attributes from studies of social networks, business relationships and small- to medium-sized enterprise (SME) internationalization, this study adopts a perceptual view of a firm’s focal “net” of relationships to examine foreign market entry mode choice. This study aims to examine how the interaction between knowledge-intensive service (KIS) firm’s network ties, embeddedness and position is related to choice of mode and subsequently the firm’s perceived insidership status within its focal net.Design/methodology/approachThis research is based on qualitative interviews with 25 small- to medium-sized KIS firms engaged in direct exporting or foreign direct investment (FDI). This study derives an empirically grounded framework of four distinct network patterns of these KIS firms through an iterative process of triangulation between cases and theory.FindingsThe four network patterns illustrate the complex interaction between network attributes and entry mode choice by KIS firms. The findings suggest formal ties and centrality in closed network relationships provide the “central controller” firm discretion over their entry mode choice. Resource-intensive FDI by “opportunistic investors” proved essential to securing centrality through formal, institutional ties. Less optimal patterns lacking institutional ties and centrality, however, precluded choice of FDI by “specialized exporters” and “client followers.” The study finds that entry modes are less likely to be influenced by the firm’s embeddedness in open or closed network relationships, but rather by the desire to achieve a more central network position and legitimacy through more formal, less imitable ties.Research limitations/implicationsThe findings demonstrate the importance of network structure, a position of centrality, and strength of professional and institutional ties to small KIS firm internationalization. By adopting a more finely grained examination of the interaction between key attributes of the firm’s focal net, this study provides a valuable first step in conceptualizing the complexities associated with networking and adoption of export/investment internationalization modes.Practical implicationsThere are a number of implications for the strategic and operational facets of smaller KIS firm internationalization. To avoid excessive network liability for resource-deficient SMEs, practitioners should consider network positioning as a strategic activity, with the costs associated with building and maintaining networks offset against economic- and resource-related returns.Originality/valueThe authors contribute to a better understanding of entry mode choices of KIS by taking a network perspective that accounts for the combined effects of different network attributes. The four network patterns identified extend current theoretical knowledge on the role of networks for entry mode choices of small KIS by highlighting that entry mode choices reflect the particular firm’s focal net and its attempt to achieve insidership status through high centrality and formal ties.

Pretpostavke nastanka i ekspanzije "globalno rođenih" preduzeća u Srbiji

Early internationalization has been widely recognized as an important research topic since 1990s when the term "born global firms" was for the first time introduced. Although there is significant research interest for early internationalization in developed and developing countries, in Serbia and Western Balkan this topic has not received considerable attention from the scientific community. At the same time, early internationalization of small and medium-sized firms is present and can not be neglected in the region and Serbia. This paper aims to identify the main prerequisites for the development of born global firms, and to identify and analyze small and medium-sized firms from Serbia with international business orientation from their founding. The analysis will be conducted based on literature review and available secondary data on small and medium-sized firms and their export. In this way, the early-internationalized small and medium-sized firms from Serbia will be mapped. As there are no available databases, this research will provide first insight into the extent of early internationalization and emergence of born global firms, and their characteristics, regarding industry, location, number of employees, business experience, and export expansion. The results would be discussed in regard to the studies conducted in developed countries. Some policy implications in the area of export promotion will be recognized.

The role of digital presence and investment network signals on the internationalisation of small firms

This article proposes a network signalling theory approach to analyse small firm internationalisation in the digital economy. We use a data set of 4446 small- and medium-sized firms extracted from Funderbeam and logit regression models to test five hypotheses about internationalisation. Exploring a firm’s digital presence indicates that the number of social media followers is a better indicator of internationalisation than website traffic, highlighting the importance of engagement signals in the digital space. Investment signals such as the time and size of funding are also positively related to internationalisation but surprisingly, not the number of investors, suggesting that more focused investment strategies work better in the international context. To complement our international network signalling approach, controlling for firm factors such as age and size and environmental factors such as competition and industry provides a more detailed analysis. Our contribution lies in extending signalling theory in the context of international networks using a novel and extensive data set.

The nature of individual experiential knowledge in internationalizing SMEs: pitfalls of superstitious learning and the need for wisdom

PurposeThis study addresses the research question: How does the experiential knowledge, superstitious knowledge and the wisdom of CEOs influence the internationalization behaviour of SMEs?Design/methodology/approachAn exploratory qualitative study is used. Longitudinal case studies of two Swedish life science companies are analysed.FindingsAn individual's prior experiential knowledge influence the newly started SME's market commitments and internationalization behaviour. Such prior experiences can enable early and rapid resource commitments in the newly started SMEs. Relying upon such prior experiential knowledge in deciding upon the company's market commitments however heightens the risk of superstitious learning. The findings illustrate how wisdom can work as an antidote to superstitious learning. Wisdom lures even experienced CEOs away from believing they know more than they actually know.Research limitations/implicationsThe study contributes to extend the Uppsala model by incorporating the role of individual-level experiential knowledge. The study also adds value to the literature on small firm internationalization by providing propositions for how the prior knowledge of individual key decision makers influences SMEs' internationalization behaviour. The propositions provide new input to the ongoing discussion in the literature and help to guide future research.Originality/valueGiven the fact that the Uppsala model is centred upon a firm-level view on experiential knowledge, our theoretical understanding is still limited regarding how individual-level experiential knowledge influences the internationalization behaviour of SMEs. This study addresses calls for research on how individuals' prior knowledge influences small-firm internationalization.

Compressed internationalisation: New internationalisation behaviour of small New Zealand firms

Two important phenomena have increasingly been noted in relation to small firms: they are internationalising more often and early in their life cycle. However, less is known about the other process dimensions of small firm internationalisation, particularly about the number of international markets small firms venture into, their choice and geographic scope of international markets, and levels of commitment in these markets. If we follow the internationalisation process models, we can assume that small firms will gradually internationalise and increase their commitments to psychically close international markets. However, as this empirical study using multiple case study methodology shows, recent internationalisers are internationalising to multiple and distant markets across a broader and global geographic scope with a low and fluctuating international market commitment. This internationalisation behaviour reflects “compressed internationalisation” involving the compression of internationalisation processes across distances and geographic markets. Although compressed internationalisation has largely been enabled by the new international environment, internationalisation strategy and international entrepreneurial orientation influence whether a firm engages in compressed internationalisation.

Entrepreneurs’ passion, home country’s institutional voids and small firm internationalization

The international entrepreneurship literature has revealed that entrepreneurs’ psychological characteristics drive a firm’s degree of internationalization. However, drivers that relate to entrepreneurs’ passion are not well developed in the international entrepreneurship literature. To fill this gap, this study uses a sample of 233 small firms to examine how entrepreneurs’ passion is related to small firms’ degree of internationalization and it also investigates whether this relationship is affected by levels of the home country’s institutional voids. The results show that passion is positively related to firms’ degree of internationalization and this relationship is positively moderated by levels of institutional voids. Implications for theory and practice are discussed.

Impediments to globalisation and financing of small exporting firms: evidence from Southwest Louisiana

The primary purpose of this study is to explore the problems and prospects of internationalisation and financing of small firms using those domiciled in Southwest Louisiana as an example. The data on firm characteristics, extents and sources of local financing and export willingness are collected from the primary source by administering a questionnaire. The survey findings conclude that the small firms in the southwestern region of Louisiana have enormous export potentials. The impeding factors include paucity of export awareness among small firms, and information gap including misinformation about the perceived overall risk, associated with exporting. The fears of international business risks among the small firms seem exaggerated. The export impediments can be overcome by active involvements of the state and local chambers of commerce, Small Business Administration units and the local banks.

EXPORT POTENTIAL OF THE RUSSIAN FEDERATION IN THE NON–RESOURCE SECTOR AND PROSPECTS FOR ITS GROWTH

TodayRussiahas embarked on the difficult path of transition to a new, higher, production and export level, so it is important to understand in which areas domestic enterprises can increase supply volumes abroad and most successfully compete in the global market. To this end, the article identified the key features of the concept of «export potential»: its dependence on the existing production capacity and the competitiveness of products manufactured for export. A retrospective analysis of the commodity structure of Russian export deliveries showed that non-fuel components account for about 41%, and about 34% of products have a non-resource character, with positive dynamics in such important groups as «machinery and equipment», «chemical products and rubber» and others. However, by the end of 2017, there is a predominance of goods of the lower redistribution (about 46% of non-resource non-energy exports), that indicates the high dependence of the Russian exports on the simplest products. Experts identified the points of growth of non-resource exports: the sphere of high technologies, the internationalization of small and medium-sized firms, the development of the regional export potential, and the expansion of tourism and educational services exports.

Evaluating people-related resilience and non-resilience barriers of SMEs’ internationalisation

PurposePeople-related factors are very significant barriers for the internationalisation of large and small firms. Although the literature has identified a number of steps that SMEs need to take to increase their resilience in international markets, a study that identifies both the resilience and non-resilience barriers for SME internationalisation has not been undertaken in the scientific fields Human Resource Management and International Business. This paper aims to examine resilience and non-resilience barriers faced by SMEs in a developing country. In addition to the resilience literature, they examine non-resilience and combine its characteristics with resilience barriers from the Bangladeshi context.Design/methodology/approachQuantitative data analysis technique is used in this study to identify the impacts of these resilience/non-resilience issues’ internationalisation of SMEs both from micro and macro levels. This study has used primary data collected through the questionnaires from 212 Bangladeshi SMEs. Based on the data, this study has developed and validated partial least square-based structural equation model to assess the impacts of resilience factors on the internationalisation of SMEs with particular attention to entrepreneurial attractiveness.FindingsIt has successfully framed resilience vs non-resilience barriers of the internationalisation of SMEs as a second-order hierarchical reflective model and found that internationalisation of SMEs is significantly influenced by the resilience factors where language and related socio-cultural issues are marginally more significant.Research limitations/implicationsA couple of limitations include the following. First, concentrating on resilience and non-resilience serves as a limitation as the authors could have had resilience vs other categories such political, economic, legal and technological barriers. Second, they have mainly used cross-sectional data by using the survey method. This study could have been better served had they also tried to combine the use of qualitative analysis as attempted elsewhere.Practical implicationsPractically, this study researched in an area which was neglected and under-reported by existing studies. Its exploration showed that it has potential to contribute significantly to the policymakers and implementers, as it comprises SMEs and emerging countries. It has been noted in the literature that these economies and firms are less capable to conduct research independently, as they are resource-constrained.Social implicationsThe results reveal that both resilience- and non-resilience-related barriers are significant to SMEs internationalisation. However, if policymakers were to give priority to any one of these, they should give marginally more priority to resilience-type barriers compared to the non-resilience barriers to internationalisation.Originality/valueTo date, studies on resilience have concentrated on identifying challenges faced by firms and what types of behaviours are required by individual members so as to enhance survival. However, there are no studies so far on identifying or even modelling both resilience and non-resilience barriers within the context of SMEs internationalisation in developing countries. This study combines resilience and non-resilience factors in a model to find out their contribution especially in the under explored area of non-resilience from a Bangladeshi contextual perspective that seeks to encourage international entrepreneurship.

Opportunity Discovery and Creation as a Duality: Evidence from Small Firms’ Foreign Market Entries

Little research addresses the likely enabling character of the discovery and creation of opportunities during the internationalization of small firms or how international opportunities are found and constructed during the process of foreign market entry (FME). This article therefore studies how opportunities become connected during small firms’ FME. By incorporating the concept of duality, this article conceives of the discovery and creation of opportunity as mutually enabling rather than opposed. From this duality perspective, opportunity discovery and creation facilitate each other during internationalization processes. This case study involves five high-tech Australian firms and 30 FMEs. The findings show that knowledge, networks, and capabilities enable opportunities in the FME context. International opportunities are connected and nested in different levels of generality and specificity. The FME opportunities may be based on opportunity embeddedness, because each opportunity has implications for other opportunities. The findings lead to a model and propositions to explain the relationships between opportunity discovery and creation in FME.

Key drivers of SMEs export performance: the mediating effect of competitive advantage

PurposeWith its focus on the context of small firm internationalization, this paper aims to assess the important contribution of strategic determinants that influence export performance (EP), considering the mediating effect of competitive strategy.Design/methodology/approachBased on survey data from 247 Portuguese small and medium-sized enterprises (SMEs) exporting textiles, members of the Portugal’s Textile Association (ATP), this research adopted a quantitative methodological approach, conducting an exploratory and transversal empirical study.FindingsThe paper finds suggest that entrepreneurial orientation (EO) has a positive and significant influence on differentiation and EP. Moreover, the results also highlight the role of intangible resources (IR) in the design of both differentiation and cost leadership strategies, which drives EP. Finally, absorptive capabilities (ACAPs) are highly related with EP.Practical implicationsThe paper provides empirical evidence that EO, IR and ACAPs are predictors of competitive strategies and EP. Moreover, and alongside with firm’s resources, this study validates that competitive strategy does matters for small firm managers and the development of one type of competitive advantage is also a major performance enhancer.Originality/valueThis study provides fresh insights into entrepreneurship and strategic management literature, as it considers the importance of multiple factors to SMEs business growth. Moreover, this paper presents empirical evidences of the strategies that small firm managers should pursue and policy makers should support. Finally, this is an original study applied to the Portuguese textile industry.

Influences of international orientation and export commitment on the export performance of emerging market SMEs

In the past few years, the internationalisation of small and medium-sized firms (SME) has accelerated, evolving from a slow and gradual process. Many studies indicate that the faster pace of internationalisation of SMEs may be related to more experienced executives engaging in international activities. The international orientation of SME managers seems to represent a basic condition for the export performance of SMEs. Other studies indicate that the export performance of SMEs would be influenced by the commitment of organisational resources to export activities. Based on a survey involving 540 Brazilian exporting SMEs, this paper aims to evaluate the role of international orientation and export commitment in export performance. The results indicate that international orientation does not directly affect export performance but rather suggests an influence on the commitment to export activity of SMEs. We found that SME export commitment influences export performance.

Entrepreneurial marketing and born global internationalisation in China

PurposeThis study aims to explore the entrepreneurial marketing (EM) behaviour of Swedish born globals entering the Chinese market through their international networks. Drawing from the network theory of small firm internationalisation, this study is positioned in the domain of EM, and thus captures the relevance of EM behaviour to explain how born globals internationalise through their networks.Design/methodology/approachA qualitative case study approach of two Swedish born global companies active in the Chinese market is used. The network theory helps analyse the data in the three phases of firm internationalisation processes.FindingsThe study shows the importance of networks for the enactment of EM for born globals. The study traces the evolution of network development in the market entry process of born globals and highlights the importance of aligning network leverage with contextual factors for market performance.Research limitations/implicationsThe generalisation of the findings is limited due to the exploratory nature of the study and the size of the research sample.Practical implicationsManagement of different types of networks is essential in the entry process and further growth of born globals in the Chinese market. In addition, born globals operating in psychically distant and complex institutionally contexts can especially gain support from intermediary networks.Originality/valueThis study extends knowledge of international entrepreneurship by demonstrating that born global managers can enact EM behaviour by leveraging networks to gain rapid entry into the Chinese market. It further highlights the role of firms’ networks in the EM activities in their internationalisation. The conceptual underpinnings of EM and network theory provide greater understanding of how born globals enter and grow their psychically distant markets.

An Institutional Change Perspective on Small Firms' Rapid Resource: Exploiting Internationalization

This study uses an institutional-change lens to analyze the rapid resource-exploiting internationalization of established small firms, which is an interacting result of their CEOs' perception of home- country institutional-change pressures and three firm- level institutional capabilities to adopt radical institutional change. Empirical results are based on pair-wise survey data of 146 Taiwan small manufacturers. It shows two patterns: (1)

Cosac Naify: a small Brazilian publishing house goes abroad

Synopsis The case describes the efforts of a small Brazilian publishing house to export its products to foreign markets. In fact, after several years of losses, the firm has undergone substantial restructuring and hired a new CEO, reaching modest profitability. The challenge faced by the new management team includes, in addition to keeping the firm financially healthy, to develop an international orientation, to mobilize the resources, and to develop a new strategy to go international. Research methodology The case uses primary and secondary sources, including articles from business magazines and newspapers, company site, and data from Brazilian trade organizations, Brazilian federal government, International Trade Center, International Publishers Association, and an interview with the new CEO of the firm, in charge of developing its international activities. The use of different sources permitted triangulation. Relevant courses and levels The case is designed for use in undergraduate and graduate programs in courses related to international marketing, international business, entrepreneurship, and international entrepreneurship. Theoretical bases The case can be used to discuss the role of networks in the internationalization of the firm and the issue of distance to foreign markets (Ghemawat, 2001), using Ghemawats CAGE model. The case can also be utilized to examine barriers to the internationalization of smaller firms (Leonidou et al., 2007; Kahiya, 2013).

The Role of Strategic Partnerships in the Internationalisation of Small Born Global Firms

Objective: The article discusses motives driving the internationalisation of small born global firms and explores the role strategic partnerships play in the process. It argues that born globals are forced into international markets soon after their foundation due to limited domestic market capacity. Furthermore, they attempt to prevent competition on international markets and secure first mover advantages. Research Design & Methods: Based on primary data gathered in the course of interviews with founders and senior managers of British born globals operating in different industry sectors, the article offers new insights into the role of partnerships during early stages of internationalisation. Findings: The article reveals that beside serendipitous opportunities, the motivation and opportunity recognition of the founder/manager play a vital role in firms’ early internationalisation. Strategic partnerships appear to help born globals in overcoming resource constraints and their liability of newness and smallness. Also other factors, such as increasing brand recognition and the enhancement of the firm’s credibility motivate born globals to engage in strategic partnerships from an early stage. Implications & Recommendations: The research results lead to a conclusion that strategic partnerships are suitable only for a particular period of time, which begins shortly after the firm’s inception and ends when the born global firm becomes more established. Contribution & Value Added: The article provides novel understanding of the role of strategic partnerships play in the early internationalisation of born globals. Furthermore, it adds new insights into the evolution of such partnerships.

THE IMPACT OF INTELLECTUAL CAPITAL ON BUSINESS INTERNATIONALIZATION PROCESSES IN LITHUANIAN FIRMS / INTELEKTINIO KAPITALO ĮTAKA VERSLO INTERNACIONALIZACIJOS PROCESAMS LIETUVOS ĮMONĖSE

Intellectual capital is the main factor contributing to the growth of economy and increasing competitiveness in global market. The need for internationalization of small firms increases in globalization context. Intellectual capital and human capital have significant impact on internationalization of organizations. The paper aims to review the concept of intellectual capital and its assessment, to reveal the significance and importance for internationalization of Lithuanian firms. The investigation is based on analysis and synthesis of prevailing scientific literature, investigating intellectual capital and internationalization. Intelektinis kapitalas yra pagrindinis veiksnys, padedantis kurti įmonėje pridėtinę vertę, skatinantis ekonominį augimą ir didinantis konkurencingumą globalioje rinkoje. Globalizacijos kontekste auga mažų įmonių poreikis internacionali-zuoti savo veiklą. Organizacijų internacionalizacijai didelę įtaką turi intelektinis, o ypač žmogiškasis kapitalas. Šio straipsnio tikslas yra apibendrinti mokslinėje literatūroje aptinkamą intelektinio kapitalo sampratą ir jo vertinimą, išryškinti jo reikšmę bei svarbą Lietuvos įmonių internacionalizacijai. Atliktas tyrimas grindžiamas mokslinės literatūros analize ir sinteze, intelektinio kapitalo bei internacionalizacijos klausimais.

Effectuation e a influência das redes sociais em internacionalização de startups em aceleradoras

Aceleradoras recentemente se tornaram uma alternativa mais atuante do que as incubadoras como um mecanismo de apoio e desenvolvimento de startups de base tecnológica, inclusive em sua internacionalização. Ao mesmo tempo, redes sociais possibilitam e aumentam a velocidade do processo de internacionalização de pequenas firmas por meio da obtenção de recursos de terceiros e de conhecimento de mercado. Neste contexto, o objetivo desta pesquisa foi a busca de uma maior compreensão sobre como as aceleradoras agilizam o processo de internacionalização das startups nelas incubadas. Foi realizado um estudo de caso único em profundidade de uma startup de internet. A análise do processo de internacionalização da empresa teve como base teórica a abordagem do empreendedorismo internacional e a teoria de effectuation. Os resultados indicaram que a startup se beneficiou de recursos e conhecimentos obtidos por meio da aceleradora, os quais seriam comumente obtidos por meio de uma rede social. Além disso, a aceleradora, substituindo a rede social informal de maneira formal e estruturada, foi capaz de aumentar a velocidade de internacionalização da firma. A principal contribuição deste artigo é a de iluminar mais detalhadamente a conexão entre os princípios teóricos da effectuation e o uso de redes sociais na internacionacionalização de pequenas firmas.