Internationalization Of Small And Medium-sized Enterprises Research Articles

What Is Going on with the Research into the Internationalization of Small and Medium-Sized Enterprises (SMEs)? An Intellectual Structure Analysis into the State-of-the-Art (1990–2018)

The internationalization of Small and Medium-sized Enterprises (SMEs) is a topic of constant research interest due to the impact these have on economic growth and employment in developed, emerging and developing countries. A desire to understand and a growing interest in the study of the internationalization process of SMEs has provoked a significant increase in the production of manuscripts in this field in the last decade. Therefore, it is necessary to carry out periodic reviews on the state-of-the-art of this phenomenon in order to highlight advances and limitations, to motivate reflections and stimulate progress in future research. Thus, the main objective of this study is to describe the state-of-the-art of the research into SME Internationalization based on a bibliometric analysis of 1152 manuscripts published from 1990 to 2018. The results enable the identification of the main agents that are constantly developing this field through an analysis of scientific production and collaboration indicators. Furthermore, through a co-word analysis, this research establishes hot-spot research trends that need to be developed in future research. The main contribution of this research is the configuration of a knowledge map on SME Internationalization research.

Contribution of Internationalisation to SME Growth: Evidence from the Kenyan Manufacturing Sector

Abstract Sub-Saharan African countries are among the poorest countries in the world and there is a need to develop their economies. Researchers suggest the promotion of small and medium-sized enterprises (SMEs) to foster economic development in countries. Internationalisation has been proved to be a key strategy for SME growth. This study investigates the effect of internationalisation on manufacturing SME growth in Kenya. Kenya is a developing country and the leading economy in the East African community. Using data from the World Bank enterprise survey, a sample of 94 SMEs operating in Kenya between 2013 and 2018 was selected. Multiple linear regression analysis using ordinary least square (OLS) was applied and the results revealed that internationalisation through direct exports contributed positively to the growth of manufacturing SMEs in Kenya. The findings of the study suggest that policy makers should promote internationalisation of SMEs in Kenya to improve the doing business environment in general and remove external barriers to internationalisation of SMEs at the national and international level in particular.

Institutional knowledge in Latin American SMEs

ABSTRACT This study explores the perceived importance of institutional knowledge on small firm’s ongoing business internationalization. The sample consists of 200 exporting small and medium-sized enterprises (SMEs) from two Latin American emerging economies Chile and Peru. The theoretical framework integrates institutional knowledge and the internationalization of SMEs. Hypotheses are tested using structural equation modeling. We extend SMEs internationalization research by differentiating between types of experience in foreign markets, and how this develops institutional knowledge for SMEs. This is associated with contextual conditions in emerging markets. To build institutional knowledge, Latin American SMEs need to conduct several businesses in one country. This finding differs with previous studies in developed countries where SMEs need to conduct multiple businesses in different countries.

Service innovation and internationalization in SMEs: antecedents and profitability outcomes

Both innovating and internationalizing can hold the key to survival and growth among small- and medium-sized enterprises (SMEs). Service innovation in particular is highly relevant in the increasingly digitalized and high-technology global trade. However, there have been until now few studies on service innovation in international entrepreneurship. Thus, in an effort to illuminate its role in entrepreneurial internationalization, the present study examines the profitability impact of service innovation in SME internationalization, while also outlining the differing impacts of entrepreneurial orientation and human capital as the antecedents of both. The empirical data were collected via an online survey of Finnish SMEs in the information and communications technology (ICT) industrial sector, the final sample comprising 104 companies. The data were analyzed through structural equation modeling. The results indicate, first, that entrepreneurial orientation underlies both degree of internationalization and service innovation, yet different dimensions of entrepreneurial orientation have distinct impacts on the two outcomes. Second, we find that the level human capital also determines the level of service innovation in as an antecedent and third, international expansion, but not service innovation, has a negative impact on profitability. We discuss the implications of these results, which imply that SMEs may face an internationalization-innovation paradox in that engaging in both activities may not be a feasible strategic option for them, and that prioritizing internationalizing in favor of innovating may incur costs and result in lower profitability.

Internationalisation process and international performance of emerging countries small and medium-sized enterprises (SMEs): a conceptual model based on effectuation and causation approaches

Business growth and performance are central topics in entrepreneurship research. Regarding the increased interest in entrepreneurship, new theoretical perspectives such as effectuation and causation have appeared to analyse entrepreneurial behaviour. The effectuation theory was introduced during this last decade to SMEs' internationalisation research, alongside with causation. In this work, we investigate the influence of entrepreneurs from emerging countries and their decision making logic on SMEs' international performance. We first aim to highlight the evolution and the development of SMEs internationalisation in scientific research. Also, we shed light on effectuation and causation in the international context and the interaction of these two decision making logics in emerging economies. Finally, we propose a conceptual model based on effectuation and causation to attempt a better understanding of SMEs' internationalisation in emerging countries, and how both behavioural logics have an impact on SMEs' international performance.

Business model innovation in international performance: the mediating effect of network capability

Networks and business models are two critical defining factors in the internationalisation of small- and medium-sized enterprises (SMEs). Although scholars have recently suggested that business model innovation be linked to dynamic capabilities, there has been limited research interest. This study aims to do so by linking business model innovation with dynamic networking capabilities and examining their role in SME internationalisation. Using a sample of 210 internationally operating Finnish SMEs and conducting regression and mediation analysis, we find that: 1) network capability predicts business model innovation in SMEs; 2) business model innovation predicts higher international performance; 3) business model innovation mediates the relationship between network capability and international performance. The study thus contributes by establishing network capability as an antecedent of business model innovation in achieving international performance.

Business model innovation in international performance: the mediating effect of network capability

Networks and business models are two critical defining factors in the internationalisation of small- and medium-sized enterprises (SMEs). Although scholars have recently suggested that business model innovation be linked to dynamic capabilities, there has been limited research interest. This study aims to do so by linking business model innovation with dynamic networking capabilities and examining their role in SME internationalisation. Using a sample of 210 internationally operating Finnish SMEs and conducting regression and mediation analysis, we find that: 1) network capability predicts business model innovation in SMEs; 2) business model innovation predicts higher international performance; 3) business model innovation mediates the relationship between network capability and international performance. The study thus contributes by establishing network capability as an antecedent of business model innovation in achieving international performance.

Future trends and Italian SMEs

The stagnation of the domestic market has brought the majority of the small and medium-sized enterprises (SME) to their knees, leading them to reinvent their way of doing business and find new strategies in order to survive and grow when the environmental conditions are deeply changing. On the one hand, new trends create a strong disruption on a structural level among the productive fabrics, but on the other hand, they represent also an opportunity, which opens new scenarios and new possibilities for the relaunch of SMEs. Among the most important challenges for Italian SMEs is internationalization, which is the possibility for enterprises to trade their goods not only on the domestic market but also on the foreign markets trying to find new opportunities to obtain some advantages. This is a very complicated process, traumatic and challenging in term of resources, but the possibility to have a genetic patrimony and a productive value, as the ones of the “Made in Italy, gives to the products of Italian enterprises a high level of competition and strong differentiation, making this process more accessible. The growth and competitiveness of enterprises, in particular SMEs, increasingly depend on the ability to apply new knowledge, working methods, and technologies as well as on the opportunity to participate in the commercialization of research developments in order to create new products, services or processes. Therefore, companies should strive to benefit from the opportunities and competitive advantages that innovation brings. SMEs play an important role in economic growth and provide most of the new jobs in Italy. Within the framework of this paper, the insight into the SMEs internationalization process is presented. The article provides an analysis of SMEs in the process of internationalization. Besides it concentrates on the new threats and opportunities represented by the new industrial revolution - Industry 4.0. Analyzing the impact of Industry 4.0 on the internationalization of Italian SMEs, the authors explain the solutions that are being used and the ones that should be taken.

Catalysts for Rapid Internationalization of SMEs: Born Globals in South Korea

This research article analyses the present explanations of the phenomenon of born globals, in particular within the context of South Korea with the objective of identifying the characteristics that can affect the rapid internationalization of small and medium-sized enterprises (SMEs). The traditional theories of internationalization have built with the aim of illuminating the internationalization of large multinational enterprises (MNEs). These models explain that doing international business develops progressively over time and firms establish themselves domestically before gradually turning into global markets. However, those traditional theories were unable to clarify the way of acting of companies which include SMEs that leapfrog or rising development of born globals. This has created a requirement for a new interpretation of internationalization. As an export-led country, born globals play an important role in improving South Korea's competitiveness. This review has significant implications which propose that many characteristics can affect the rapid internationalization of SMEs in South Korea even though they are still not precisely clear. Thus the paper highlights that wider empirical research is significant to this country for understanding the specific characteristics that are responsible for the rapid internationalization of their SMEs.

Romanian SMEs Internationalization in the Light of Internal Capabilities and External Conditions. A Secondary Data Analysis

Abstract The topic of small and medium-sized enterprises (SMEs) within the framework of the internationalization phenomena has often hewed the paths for many conceptual and empirical analyses all the more so as the global environment has pushed smaller actors out of their regular habitat. Issues such as the support of SMEs innovative capabilities, of knowledge sharing mechanisms and collaborative networks via cross-border operations or as the thorough adjustment to the new market conditions have sprung as pivotal concerns for both academics and practitioners interested in business development, performance, innovation and effectiveness from a myriad of perspectives. Giving credit to these research and real-life priorities, the current paper aims to discuss different facets of the SMEs internationalization process, laying emphasis on their internal capabilities and external conditions. The empirical undertaking relies on a secondary data analysis which covers the facts and figures comprised by European official reports. The focus is on the Romanian SMEs internationalization variables which are descriptive of the current state of cross-border dynamics. The findings advance that Romanian entrepreneurs and SMEs have been supported in the recent years by a series of European and national governmental initiatives, yet many additional measures and facilitation instruments are needed to properly improve their overall performance on international markets.

Women Entrepreneurship in International Trade: Bridging the Gap by Bringing Feminist Theories into Entrepreneurship and Internationalization Theories

Participation of women-owned small and medium-sized enterprises (SMEs) in international trade is gaining more importance in the transformation of institutional changes. Although women entrepreneurs contribute to the social and economic development, the role of social, cultural, and legal institutions in fostering women entrepreneurship is still debatable. This argument remains controversial as there is no single theory that has explained the phenomenon of women-owned firms in international trade. Because of the missing link between gender sensitivity and the existing theories of entrepreneurship and internationalization, there is a significant research gap. To fill up this research gap, this study revisited existing theories from three research domains: feminism, entrepreneurship, and internationalization. Factors derived from revisiting theories of entrepreneurship and internationalization were evaluated based on findings from the review of the feminist theories. Finally, key parameters were selected to assess the internationalization of women-owned SMEs, which require future empirical investigation.

Renewable energy market SMEs: antecedents of internationalization

PurposeThe purpose of this study is to provide a foundational understanding of the internationalization of small- and medium-sized enterprises (SMEs) operating in the context of renewable energy markets. The focus is on exploring and identifying the managerial-, firm- and environmental-level antecedents to their international expansion, which also furthers the understanding of the distinct SME’s internationalization context within the renewable energy market.Design/methodology/approachThe study adopts a qualitative multiple case study approach in a Finnish SME context and identifies the antecedents’ relative prominence at the managerial, firm and environmental levels.FindingsThe findings indicate that, although internationalization antecedents of renewable energy SMEs differ owing to market forces such as trends, networks and changing regulatory policies, they share antecedents similar to those of SMEs in other industries.Research limitations/implicationsThe main limitation of this study is its single-country home market empirical context. Future studies should expand analysis to different regulatory and regional environments.Originality/valueTo the authors’ knowledge, there are few studies that explore the antecedents of SMEs’ internationalization, especially in the renewable energy market context. Hence, this study contributes to the international business and entrepreneurship literature by illustrating the fundamental managerial-, firm- and environmental-level antecedents to the internationalization of SMEs operating in the renewable energy business. In addition, it highlights the peculiarities of renewable energy SMEs’ internationalization, suggesting that extant research on SMEs’ internationalization has not adequately captured the intricacies present in the internationalization of renewable energy enterprises.

Internationalization as a strategy for small and medium‐sized enterprises and the impact of regulatory environment: An emerging country perspective

AbstractThis study focuses on identification, categorization and comparison of regulatory barriers to internationalization for the small and medium‐sized enterprises (SMEs) from an emerging market context. Primary data were collected to develop and validate a structural model to assess the salient regulatory barriers of internationalization with a particular attention to the SMEs in Bangladesh. Structured questionnaire has been used to collect data from 212 SMEs operating in Bangladesh. The results indicate that both administrative and economic regulatory barriers are significant for the internationalization of SMEs whereby administrative regulatory barriers are slightly more substantial. This study provides further discussion from both theoretical and methodological aspects. By developing and validating structural model, this study contributes to the literature on small business and regulation with particular attention to the emerging markets.

Impact of determinants on early internationalization

Purpose The purpose of this paper is to analyze the influence of determinants on early internationalization in the context of an emerging economy, i.e. India. Design/methodology/approach The study is based on an ex post facto exploratory research using primary data collected from a sample of 102 exporting small- and medium-sized enterprises (SMEs) in Bangalore. Findings The overall results reveal that it is the proactive entrepreneurs and their previous experience that determine the early internationalization of SMEs. Further, competitive constraint was a major obstacle to enter the international market at an early age for late internationalized SMEs. Practical implications The policy initiatives should aim to develop the international orientation of the entrepreneurs in the firm as a precursor for the formulation and subsequent implementation of internationalization strategies. Originality/value Although studies have been conducted on determinants and early internationalization, these are confined to a few dimensions, and none of the studies have looked into the issues affecting the early internationalization holistically and with respect to SMEs in India.

SME internationalisation process: Key issues and contributions, existing gaps and the future research agenda

The literature that studies internationalisation of small and medium-sized enterprises (SMEs), despite being only recent, has already become very extensive and fragmented, taking different approaches and contributing across diverse facets of internationalisation. There is also a need to analyse and systematise those issues that have received the attention in the field of SME internationalisation. This study aims to develop a systematic literature review on SME internationalisation. We correspondingly make recourse to the Web of Science and Scopus database, and analyse a total of 366 articles, spanning the period from 1995 to 2017, to identify the core issues and contributions made by the existing literature. The results enable the categorisation of the existing literature into three main areas of research: i) Internationalisation process, ii) Specific factors/variables influencing internationalisation; and iii) Internationalisation and performance. This structuring then establishes the grounds for grasping the gaps existing in the literature and to propose a future research agenda.

Three Stages of Trust Building of International Small- and Medium-Sized Enterprises

In a globalized world, more and more firms inevitably have to deal with other businesses from a far distance that they perhaps have never met and thus hardly know each other. The escalating level of globalization of business has brought with it the increased importance of trust in international business. Various studies have confirmed the importance of trust as one of the key elements for a successful business partnership. However, less is known about how international small- and medium-sized enterprises (SMEs) develop and maintain trust. This research investigates the characteristics of trusted business partners and how trust is built and maintained over time. In-depth interviews were conducted with the management of 20 international SMEs in Thailand. The essences of trust, namely competency and professionalism, honesty and integrity, empathy and caring and three-stage model of trust building and maintaining in international business are proposed.

Business model innovation and entrepreneurial orientation relationships in SMEs: Implications for international performance

Academic research is increasingly emphasizing the critical role of business models (BMs) and business model innovation (BMI) in the international entrepreneurship (IE) domain, yet empirical studies on the topic are quite limited. This study demo0nstrates the role of BMI and entrepreneurial orientation (EO) in the internationalization of small-and medium-sized enterprises (SMEs). Specifically, we explored the mediating role of BMI in the relationship between EO and international performance among internationalizing SMEs. Drawing on a cross-industrial sample of 95 international Finnish SMEs, we empirically test the hypothesized relationships by developing a confirmatory factor analysis measurement model with subsequent application of ordinary least squares multiple regression. The results suggest that BMI positively and significantly mediates the relationship between EO and international performance. In addition, EO has a positive and significant effect on SMEs’ BMI. Thus, the findings of the study imply that both BMI and EO are important drivers of international performance for internationalizing SMEs. The study contributes to the IE literature by illustrating the dynamics of BMI and providing evidence of the linkages between strategic orientations and BMI in the international performance of SMEs.

Examining economic and technology‐related barriers of small‐ and medium‐sized enterprises internationalisation: An emerging economy context

AbstractIn today's global marketplace, small‐ and medium‐sized enterprises (SMEs) are increasingly looking at internationalisation strategies to boost growth, profitability, and competitiveness. However, challenges, such as, sociocultural differences, political institutions, limited resources, competitive challenges, market threats, and economic and technological barriers all hinder SMEs from entering and competing favourably in the international markets. Considering the important link between lack of resources and internationalisation of SMEs, this study examined economic and technology‐related barriers of SMEs internationalisation from a neglected yet emerging market context in Bangladesh. To compare the relative importance of these two particular categories of barriers, this study developed and validated a partial least square‐based structural equation model (PLS‐SEM) with primary data gathered from questionnaires from 212 Bangladeshi SMEs. The findings of the paper suggest that technology‐related barriers seem slightly more influential than economic barriers. As the difference is very low, importance should be given to both types of barriers as found. Conceptually, this study extends this area of research by reframing economic and technology‐related barriers of internationalisation as a hierarchical reflective model within an emerging economy context. Empirically, it confirms that PLS‐SEM can be used to compare the relative importance of these two types of barriers. Practically, policy makers can give slightly more priorities on the technology‐related barriers where it is not possible to give equal importance to both because of limited resource and research neglect on developing economies.

Competitiveness and Its Impact on Sustainability, Business Environment, and Human Development of EU (28) Countries in terms of Global Multi-Criteria Indices

In this paper, the following research problem was addressed: Is there a significant economic impact of multidimensional specified competitiveness within the EU (28) countries on the competitive business environment, human development, and sustainable growth? Based on the mentioned research problem, we formulated the aim of paper: To detect the significant interrelations among the assessment of global competitiveness, business environment as well as human development in the EU (28) countries for the period of 2006–2017. To address these problems, the methodology of global multi-criteria indices, namely the global competitiveness index (GCI), doing business index (DBI), and human development index (HDI), as well as panel analysis and non-linear regression analyses with ANOVA, were applied. The panel analysis results suggest that there is a direct linear relationship between the GCI and HDI. Moreover, the impact of the DBI on the change in the GCI score was not confirmed. We identified the main areas of countries’ interest, and important economic and statistical significant relations of competitiveness by creating three models: The GD model (constructed by GCI and DBI scores), GH model (GCI and HDI scores), and GDH model (GCI, DBI and HDI scores). Based on the results, all interrelations were confirmed. However, the highest extent of variability for the explanation of the selected data was recorded in the case of the GDH model (87.12%). We detected the impact of the business environment and human resources as competitive advantages on global macroeconomic competitiveness. As the business sector in EU (28) countries is represented mainly by small and medium-sized enterprises (SMEs), enterprise activities play a key role in the process of sustainable competitive economic development. Moreover, human resources are considered to be another important driver of the internationalization of European SMEs.

An institution-based view of international entrepreneurship: A comparison of context-based and universal determinants in developing and economically advanced countries

The objective of this paper is to investigate the institutional characteristics of different geographic contexts that affect the internationalisation of small and medium-sized enterprises (SMEs). The study focuses on three categories of factors: (a) sociocultural, (b) political/legal, and (c) economic. Under economic factors, it examines competitive pressures in international markets, the nature of demands in international markets, domestic resources advantages, and domestic general economic characteristics. The paper identifies universal factors that influence the internationalisation of SMEs regardless of the location of the firm. These universal factors are distinguished from context-based factors, which are specific to the particular conditions of the people/location of the firm. A comparative analysis of cases from Italy and Iran allow us to find factors that are universal, others that are Iranian context-based, and one factor specific to the Italian context. Also, our analysis suggests the existence of some factors without significant influence in either country.