Internationalization Of Small Firms Research Articles

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.

Knowledge management practices in the internationalization of small firms: A four comparative case study in the coffee industry

This paper presents the results of a research that aimed at analysing the effect of the organization in international business networks on the knowledge and information management practices in micro and small enterprises (SMEs) of the Brazilian coffee industry. Through a comparative study of four cases, it was possible to conclude that: (i) the processes of creating, maintaining and sharing information and knowledge are influenced by the network as well as by cooperation, culture, relationships and interactions within and between enterprises, (ii) the sharing of information and experience brings benefits to SMEs, (iii) the network did not promote the systematization of knowledge, but facilitated its development, (iv) the establishment of an enabling environment (‘Ba’) can help individuals and enterprises to create and develop their abilities; in this sense, it was observed that the culture of cooperation can be considered essential to the process of organizational learning. Keywords: knowledge management, international business networks, micro and small enterprises, internationalization strategy, coffee industry.

International entrepreneurship in and from emerging economies

The globalization has been one of the most important economic events of the last decades and this has caused a higher degree of integration and interdependence between countries, with a clear increase in the volume of international businesses. Within this context, not only multinational enterprises have international orientations; new and smaller firms (SMEs) are also forced to extend the scope of their business because they face a large number of international competitors into a much wider market. Although SMEs are a major source of growth and job creation, SMEs appear to be underrepresented in the international economy relative to their contribution in national and local economies (European Commission 2015). Many SMEs have advanced on their internationalization processes and many countries are adopting specific policies and programs to enhance SMEs’ internationalization potentials to encourage their further participation in global markets. Both private and public sectors are playing important roles in helping SMEs to be more active in international trade (OECD 2005) and develop active networks for their internationalization (Felzensztein et al. 2015; European Commission 2014). From a strategic point of view, internationalization is a key factor in business success, especially in SMEs that have a high-growth prospect. We know that both networks and entrepreneurial orientation can actively help small firm internationalization (Felzensztein et al. 2015). These two topics are important and still much disputed aspect of small firm internationalization (Dimitratos et al. 2010, 2014). Understanding them can provide important insights for entrepreneurs that are choosing their internationalization strategies as well as for the institutions that may support them, such as export promotion agencies, and trade associations. In some emerging economies, like those in the Latin American context, there is a tendency to provide incentives to openness to new markets and to foster the SMEs’ J Int Entrep (2016) 14:5–7 DOI 10.1007/s10843-016-0175-y

Internationalisation of Central and Eastern European small firms

Purpose– The purpose of this paper is to investigate the internationalisation of small firms from a Central and Eastern Europe (CEE) country with an emerging market economy, while accounting for the constantly changing institutional framework as well as resource (un)availability which may influence their involvement in foreign market operations. In doing so, it supports the applicability of the revised Uppsala internationalisation process model (2009), which highlights the key role of networks for international activity.Design/methodology/approach– This study is based on a qualitative approach leading to multiple case studies. The main source of data is semi-structured, in-depth interviews conducted within six small firms.Findings– The revisited Uppsala model proves to be generally valid for the small firms analysed in this study. Networks play a crucial role for knowledge creation and exchange, and frequently represent the most reliable resource at firms’ disposal. Trust is an indispensable ingredient that shapes network relationships. Institutional changes acted as push factors for small firms’ internationalisation.Research limitations/implications– Policy-makers and entrepreneurs should direct their efforts at encouraging international network building and the formation of partnerships. Specific policy-driven actions should facilitate the connection between (international) entrepreneurs and potential foreign business partners.Originality/value– This study brings insights to the revised Uppsala model, particularly considering the continuous and relatively rapid changes within the institutional environment that interact with the experiential learning curve and resource accumulation and subsequent commitment to foreign markets. Furthermore, it is one of the few studies that address the internationalisation of small firms from a CEE economy.

Internationalization of Smaller Firms: Opportunity Development through Networks

This article aims to contribute toward a better understanding of the opportunity development process that rapidly internationalizing small and medium‐sized enterprises (SMEs) undergo. Little is known about how SMEs overcome challenges in the process of recognizing and exploiting market opportunities during their rapid expansion abroad. This article presents a longitudinal case study that illustrates how a firm's relationships with business, social, and political actors enhance its opportunity development during the internationalization process. The findings highlight that conducting matching activities at different levels helps the firm overcome challenges and succeed in developing new opportunities for continued expansion abroad. This study contributes to research on rapidly internationalizing firms by broadening the empirical and theoretical understanding of the opportunity development process for smaller firms. © 2015 Wiley Periodicals, Inc.

Networks, Entrepreneurial Orientation, and Internationalization Scope: Evidence from Chilean Small and Medium Enterprises

During the last 20 years, the literature on internationalized small firms discussed at length the speed of internationalization, illustrating the importance of born globals. The geographic scope of small firm internationalization and its implications for international business and entrepreneurship theories has however been overlooked, especially with regard to firms based in atin merica. This study expands the research agenda on the effects of networks and entrepreneurship orientation for the internationalization strategy of small firms by examining their effects on internationalization scope. It uses survey data from small firms based in hile. The findings suggest that the greater the number of networks utilized, the more entrepreneurs are likely to target markets based in diverse regions of the world. The study has managerial and policy implications, suggesting that nurturing diverse international networks can help entrepreneurs reach a broader number of markets.

Internationalization of Small Family Firms: The Influence of Family from a Socioemotional Wealth Perspective

We explore the factors influencing the internationalization of small family firms. Based on interviews with six family firms in Singapore, we highlight the importance of (1) family harmony, (2) trust in external relationships, (3) social and business networks, and (4) organizational resources and capabilities in the internationalization process. We show how the socioemotional wealth factors of trust and harmony affect networking and resources, which in turn affect internationalization. We find that initial internationalization through exports is enabled through trust in family networks, but the typical family characteristics of a desire to maintain family harmony and distrust of outsiders have a negative impact on network creation and resource development, which constrains the extent to which the firm internationalizes beyond exporting. In order to move from the first stage (exports/similar markets) to the second stage (joint ventures/different markets) of internationalization, less emphasis on trust and family harmony accompanied by more emphasis on building external networks and resources may be necessary. We propose a new model of internationalization of family firms based on our findings. © 2015 Wiley Periodicals, Inc.

Supply chains and the internationalization of small firms

This paper explores the relation between supply-chain participation and the internationalization of firms. We show that even small and less productive firms, if involved in production chains, can take advantage of reduced costs of entry and economies of scale that enhance their probability of exporting. The empirical analysis is carried out on an original database, obtained by merging and matching balance-sheet data with data from a survey on over 25,000 Italian firms, which include direct information on the involvement in supply chains. We find a positive and significant relation between being part of a supply chain and the probability of exporting, as well as the intensive margin of trade. The number of foreign markets served (the extensive margin), on the other hand, does not seem to be affected. We also investigate whether being in different positions along the chain, i.e., upstream or downstream, matters, and we find that downstream producers tend to benefit more. Our results are robust to different specifications, estimation methods, and the inclusion of the control variables typically used in heterogeneous firms models.

Small firm internationalization, innovation, and growth

This paper studies the effect of internationalization on innovation and firm performance (employment growth and sales growth) taking the interdependencies among the variables into account. Given the potential endogeneity, this study uses theory-driven instrumental variables and structural equation modelling to estimate the direct and indirect effects of internationalization. Firm-level data is obtained from a survey of 150 Dutch small firms that took part in an export promotion program. The main results show that internationalization has a positive impact on innovation. Internationalization increases firm performance directly and indirectly through innovation, while the direct impact of innovation on firm performance is insignificant. We contribute to the literature of export promotion programs as our results suggest that they not only increase small firm internationalization but also affect innovation and firm growth.

Limited in-house resources and the use of official foreign trade promotion by small businesses

Small firms face size-specific barriers with respect to entry into and development of foreign markets. To counteract these structural disadvantages, governments across the globe have established a multitude of institutions and instruments to support small firm internationalisation. Grounded in the theoretical framework of the resource-based view, our study analyses the participation patterns of enterprises in foreign trade promotion schemes with respect to firm size. Our study is based on regression analyses using data obtained from an original survey that covers 615 German enterprises across all sectors. Our findings provide strong evidence that: 1) small businesses use foreign trade promotion programmes to a lesser extent than their larger counterparts; 2) the lack of specialised in-house resources of small firms - which should be counter-balanced by public promotion schemes - is the main reason why support measures are not more effectively used by small enterprises.

Corporate and individual global mind-set and internationalization of European SMEs

This paper analyzes the effect of individual and corporate global mind-set on the internationalization of small and medium-sized European firms. Factor analysis and structural equation modeling methodology are the tools for this purpose. Results show the importance of the relationships between individual global mind-set and internationalization effect, and between corporate global mind-set and international know-how activities. Research model recognizes the relationship between individual global mind-set and corporate global mind-set. This research contributes significantly to literature by providing insight into three key areas: factors relating to corporate GM, relationship between corporate GM and internationalization factors of SMEs, and relationship between individual GM and corporate GM.

Effects of presidents’ characteristics on internationalization of small and medium firms in Japan

Recent heterogeneous-firm models of international trade suggest that productivity determines whether firms engage in export activity and foreign direct investment. In practice, however, many productive firms are not internationalized, whereas many unproductive firms are, which suggests that there are factors other than productivity that influence firms’ internationalization. This study uses a unique panel data set for Japanese small and medium enterprises (SMEs) to examine whether the personal characteristics of a firm’s president are factors in firm internationalization. We find that SMEs with a risk-tolerant, forward-looking president are more likely to be internationalized. These effects are large in magnitude, as is the productivity effect, which provides a partial explanation as to why many productive firms are not internationalized. In addition, we find that productivity has an insignificant effect on firms exiting export markets, whereas presidential myopia increases the probability of exit. The evidence further suggests that a firm’s initial export costs become sunk following its entry into export markets, which explains why many unproductive firms are internationalized.

Resource scavenging

Purpose – There has been growing interest in studying the internationalisation of small and medium-sized high-technology firms. This literature tends to equate “internationalisation” with the “internationalisation of sales”. Yet sales are not the only international activity of high-tech firms. High-tech firms need resources and not just markets. The purpose of this paper is to contribute to an understanding of this resource dimension of the international behaviour of high-tech firms. Design/methodology/approach – The empirical basis for the study lies in a multiple case study of six high-tech small and medium-sized enterprises (SMEs). The authors selected two firms from each of three high-tech industries: biotechnology (specifically drug development), renewable energy and ICT. The key decision makers in each firms were then interviewed in depth. Findings – The authors show that for the case firms in the study, internationalisation can take the form of searching, prospecting or “scavenging” for resources. “Resource-seeking” behaviour occurs because the SMEs do not own, control or have access to sufficient resources to bring their technology to market on their own. The pattern of internationalisation that results from resource scavenging is different to that of traditional “market-seeking” internationalisation. Originality/value – This paper provides evidence of how the resource-acquisition behaviour of high-tech SMEs can be an important element of their internationalisation. Yet existing literature has focused almost exclusively on the market-seeking internationalisation of these firms.

The internationalization of small firms: The relationship between the global mindset and firms’ internationalization behavior

Some firms in internationally oriented industries are internationalized while other comparable firms in the same sector or industry do not. Observing this difference in strategic behavior among small firms led us to consider how differences in CEOs’ attitudes, international orientation, and mindset might explain it. Therefore, this study adopts a cognitive perspective on management to explore the formation of the global mindset and the relationship between the global mindset of small-firm decision makers and their firms’ internationalization behavior. A theory-based conceptual model and measurement instrument are developed and—using structural equation modeling—the model is estimated based on empirical data from cross-sectional samples of small Norwegian and Portuguese firms. The study finds: (1) a strong causal relationship between the global mindset and firms’ internationalization behavior; (2) the combination of the findings and substantive theory indicates that the main driver of firms’ internationalization operates through the global mindset. This study also covers the factors that strongly influence the formation of a global mindset, especially the decision makers’ work experience and personal characteristics in terms of propensity to interdisciplinary collaboration, cognitive flexibility, and networking capability. Based on these findings, suggestions are made for policies that can foster the internationalization of small firms.

Friends with money? Owner’s financial network and new venture internationalization in a transition economy

This article explores the role of the diversity of the domestic financial networks for the internationalization of entrepreneurial ventures in transition economies. Building on network theories of social exchange and resource dependency, it hypothesizes that the diversity of the entrepreneurial venture’s financial network will have a positive effect on internationalization and this effect will be amplified by the diversity of the entrepreneur’s personal network and the size of the new venture. A survey data collection methodology is used and three hypotheses are tested on a sample of new and small ventures in Bulgaria. Regression results show that the diversity of the domestic financial network has a positive effect on internationalization, and that its role increases with the size of the new venture. Implications for the theory of small firm internationalization, managerial practice and public policy are discussed.

Local and international networks in small firm internationalization: cases from the Rhône-Alpes medical technology regional cluster

This study explores the internationalization processes of small firms operating in the medical technology cluster in the Rhône-Alpes region in France. The study demonstrates that both the location and the sectoral type of industry cluster influence the internationalization and network dynamics in the cluster. In addition, both local and international networks influence firm internationalization processes in different ways. First, the firm life-cycle, industry and locational cluster dynamics determine the extent of network influence on firms' internationalization processes. Second, two types of internationalizing firms emerge in this study: born global firms, led by proactive entrepreneurs and globally market-orientated firms from inception, and born-again globals, which engage in late but rapid internationalization as a result of new management or foreign acquisition. Third, local networks in the cluster are important for influencing the internationalization of the born global firm at inception. In contrast, international networks serve as the main impetus for re-launching internationalization for the born-again globals. Fourth, the local research institutions and their connections abroad help both born globals and born-again global firms develop and internationalize their innovations rapidly in the global marketplace.

Internationalisation of small and medium software firms from India

The growth of small and medium enterprises (SMEs) has been a distinct feature of globalisation. This paper empirically studies the impact of internationalisation on performance of SMEs. This paper also explores the effects of geographic scope and international experience on SME performance. Based on secondary data for 29 software SMEs from India for the period 2002 to 2008, this paper finds a positive effect of internationalisation on firm performance. Drawing from multiple theoretical viewpoints, this paper discovers that while geographic scope is significantly related with SME performance, international experience has a weak association with SME performance. This paper contributes to the study of internationalisation-performance relationship of Indian software SMEs by empirically validating the positive relationship between internationalisation and performance among SMEs. The results imply internationalisation in diverse geographies and establishment of systems which facilitate knowledge transfer among ...

Internationalization pathways among family‐owned SMEs

PurposeThe purpose of this paper is to increase understanding of the internationalization of family firms; to investigate how the framework by Bell et al. on the internationalization patterns of firms could explain the internationalization pathways taken by family‐owned small to medium‐sized enterprises (SMEs); and to identify typical patterns and features in the various pathways taken by family‐owned SMEs.Design/methodology/approachThis paper reports findings from an in‐depth multiple case study with eight Finnish family‐owned SMEs.FindingsThe ownership structure had the most important role in defining the internationalization pathways followed by the family‐owned SMEs: a fragmented ownership structure led to traditional internationalization pathway whereas a concentrated ownership base led to born global or born‐again global pathways.Practical implicationsFamily entrepreneurs should carefully consider the division of ownership and seek to build new relationships in foreign markets, in addition to their primary co‐operators.Originality/valueThe authors extend the integrative model of small firm internationalization by Bell et al. toward family‐owned SMEs and highlight the most important dimensions in the different internationalization pathways of family SMEs. The ownership dimension is integrated within discussion on differing internationalization pathways. The authors utilize a family business specific perspective (the stewardship perspective), in order to understand the specific features of internationalization among family SMEs, and also how these features differ between family SMEs and other firms.

Antecedents of knowledge competency and performance in born globals

PurposeThis study aims to investigate the antecedents of knowledge competency and international performance in South Korean born globals, with particular focus on the moderating effects of the absorptive capacity.Design/methodology/approachBuilding on previous studies, the study constructs and tests a research model using structural equation modeling and multiple regression analysis for data collected from 271 early internationalizing SMEs. To secure results of hypothesis testing, non‐response bias was assessed using a t‐test, and tests for data screening and common method bias were conducted.FindingsThe results indicate that, for early internationalizing small firms, the prior international business experience of managers and networks affect building knowledge competencies. In the relationship between the use of networks and knowledge competencies, in particular, absorptive capacity is found to play a moderating role. It also finds that international business performance is driven by knowledge competencies the small firms accumulate. The findings imply that firms shortly after inception should raise their ability to acquire and utilize external resources and knowledge to secure international performance.Originality/valueThis study makes an important contribution to the body of literature on rapid internationalization of small firms by examining the moderating effects of absorptive capacity on the relationship between founding teams' prior international business experience and firms' networks and knowledge competencies. The present study thus helps move forward our understanding on drivers of knowledge competency building and performance of the early internationalizing firm.

Global mindset and the internationalization of small firms: The importance of the characteristics of entrepreneurs

Despite being a relatively new concept, the importance of the global mindset is already well-documented. So far research has primarily focused on multinational companies and therefore the operationalization of the concept is still a work in progress. Recognizing the importance of entrepreneurs in small companies, yet mindful of the gaps that exist, this paper addresses the factors that constitute the global mindset and their influence on the internationalization of small Portuguese companies. Using information-processing theory through a quantitative, survey-based study and Structural Equation Modeling (SEM), the results show the importance of the characteristics of both entrepreneurs and firms in explaining the global mindset, and confirm the impact they have on internationalization behavior. The entrepreneur’s level of education, their satisfaction with company performance in the domestic market and the potential for growth in the domestic market all affect the global mindset model. The conclusions are useful for entrepreneurs and national authorities aiming to successfully implement internationalization practices, given the role of the global mindset in exploring global business opportunities and in the global success of companies. Replication of the research in different contexts is essential for the wider generalization of the results.