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Book part
Publication date: 10 September 2018

Christiane Prange and Youzhen Zhao

The authors of this chapter investigate internationalisation strategies of small and medium-sized companies (SMEs) in China. We highlight the specific challenges that…

Abstract

The authors of this chapter investigate internationalisation strategies of small and medium-sized companies (SMEs) in China. We highlight the specific challenges that Chinese SMEs encounter when selecting international country markets in terms of distance and entry speed. The authors adopt an ambidexterity perspective that differs from traditional explanations of internationalisation behaviour by highlighting the need to balance seemingly disparate options for international expansion. Three cases provide an illustration of how Chinese companies combine distant with proximate market entries and slow with accelerated entry speed. The authors highlight how these strategies can drive and enhance international aspirations of Chinese SMEs.

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Key Success Factors of SME Internationalisation: A Cross-Country Perspective
Type: Book
ISBN: 978-1-78754-277-8

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Article
Publication date: 8 June 2020

David Freund, Robert Lee, Heinz Tüselmann and Qi Cao

The main purpose of this study is to explain the combined effects of host country weak network ties and absorptive capacity on the innovative foreign knowledge inflows of…

Abstract

Purpose

The main purpose of this study is to explain the combined effects of host country weak network ties and absorptive capacity on the innovative foreign knowledge inflows of international high-tech small- and medium-sized enterprises (SMEs).

Design/methodology/approach

Data are drawn from the two largest and most authoritative German Federal Government census-databases of biotech and nanotech SMEs. A structured survey questionnaire was administered and regression analysis adopted.

Findings

This study demonstrates weak network ties in the host country and developing absorptive capacity produce a combined effect that positively influences international high-tech SMEs innovative foreign knowledge inflows. Also, host country weak network ties and absorptive capacity when considered separately, each respectively, positively influence innovative foreign knowledge inflows.

Practical implications

The results help inform key personnel in international high-tech SMEs about the relevance of host country weak network ties and absorptive capacity for foreign knowledge inflows. In addition, the results help policymakers and think-tanks to promote tailored advice and guidance e.g. those policymakers implementing the EU Entrepreneurship 2020 Action Plan.

Originality/value

There is a recent call in the literature to combine network theory and absorptive capacity theory to better explain knowledge creation in the context of international high-tech SMEs knowledge sourcing. By addressing this call, the study provides a more refined and comprehensive account of international high-tech SMEs innovative foreign knowledge inflows.

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Multinational Business Review, vol. 28 no. 3
Type: Research Article
ISSN: 1525-383X

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Article
Publication date: 29 October 2019

Agnes Asemokha, Ali Ahi, Lasse Torkkeli and Sami Saarenketo

The 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…

Abstract

Purpose

The 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/approach

The 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.

Findings

The 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/implications

The 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/value

To 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.

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critical perspectives on international business, vol. 16 no. 4
Type: Research Article
ISSN: 1742-2043

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Article
Publication date: 9 August 2011

Ko‐Min Kevin Tseng and Rhona E. Johnsen

The purpose of this paper is to empirically examine the influence of the internet on the internationalisation process and international customer relationship interactions…

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Abstract

Purpose

The purpose of this paper is to empirically examine the influence of the internet on the internationalisation process and international customer relationship interactions of UK manufacturing small to medium‐sized enterprises (SMEs). The paper is positioned at the interface of the literature on international entrepreneurship and the internet.

Design/methodology/approach

The paper discusses the findings from multiple case studies of ten UK manufacturing SMEs from a variety of UK sectors, producing high‐, medium‐ and low‐tech offerings. In‐depth interviews with directors or managers of the SMEs were conducted. Individual and cross‐case analysis was carried out using coding frameworks to reduce and analyse the data and capture patterns in the findings.

Findings

The findings reveal how the influence of the internet in the internationalisation process and international customer relationship interactions differed in the high‐, medium‐or low‐tech SME categories. The influence of the internet differed across three main dimensions: the way in which the SMEs invested in and used different internet applications for internationalisation and customer relationship support, the SMEs' perceptions of the internet as a tool to support communication with international customers; the SMEs' reliance on more personal and interactive forms of contact with international customers.

Practical implications

The results demonstrate that the level of technological advancement of an SME's offerings has an important bearing on how these firms adopt the internet in their internationalisation process and gain advantages in their international customer interactions. The managerial implications of the study are relevant for manufacturing SMEs, their customers and government agencies involved with SMEs.

Originality/value

This research is amongst the first empirical contributions to examine the themes of the internet, internationalisation and international customer interactions in UK manufacturing SMEs and to highlight the importance of the level of technological advancement of an SME's offerings in distinguishing the ways in which the internet is used by entrepreneurial small firms in their internationalisation process.

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Journal of Small Business and Enterprise Development, vol. 18 no. 3
Type: Research Article
ISSN: 1462-6004

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Book part
Publication date: 24 August 2011

Breda Kenny and John Fahy

The study this chapter reports focuses on how network theory contributes to the understanding of the internationalization process of SMEs and measures the effect of…

Abstract

The study this chapter reports focuses on how network theory contributes to the understanding of the internationalization process of SMEs and measures the effect of network capability on performance in international trade and has three research objectives.

The first objective of the study relates to providing new insights into the international market development activities through the application of a network perspective. The chapter reviews the international business literature to ascertain the development of thought, the research gaps, and the shortcomings. This review shows that the network perspective is a useful and popular theoretical domain that researchers can use to understand international activities, particularly of small, high technology, resource-constrained firms.

The second research objective is to gain a deeper understanding of network capability. This chapter presents a model for the impact of network capability on international performance by building on the emerging literature on the dynamic capabilities view of the firm. The model conceptualizes network capability in terms of network characteristics, network operation, and network resources. Network characteristics comprise strong and weak ties (operationalized as foreign-market entry modes), relational capability, and the level of trust between partners. Network operation focuses on network initiation, network coordination, and network learning capabilities. Network resources comprise network human-capital resources, synergy-sensitive resources (resource combinations within the network), and information sharing within the network.

The third research objective is to determine the impact of networking capability on the international performance of SMEs. The study analyzes 11 hypotheses through structural equations modeling using LISREL. The hypotheses relate to strong and weak ties, the relative strength of strong ties over weak ties, and each of the eight remaining constructs of networking capability in the study. The research conducts a cross-sectional study by using a sample of SMEs drawn from the telecommunications industry in Ireland.

The study supports the hypothesis that strong ties are more influential on international performance than weak ties. Similarly, network coordination and human-capital resources have a positive and significant association with international performance. Strong ties, weak ties, trust, network initiation, synergy-sensitive resources, relational capability, network learning, and information sharing do not have a significant association with international performance. The results of this study are strong (R2=0.63 for performance as the outcome) and provide a number of interesting insights into the relations between collaboration or networking capability and performance.

This study provides managers and policy makers with an improved understanding of the contingent effects of networks to highlight situations where networks might have limited, zero, or even negative effects on business outcomes. The study cautions against the tendency to interpret networks as universally beneficial to business development and performance outcomes.

Details

Interfirm Networks: Theory, Strategy, and Behavior
Type: Book
ISBN: 978-1-78052-024-7

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Article
Publication date: 23 September 2021

Xiaoxuan Li, Yue Wang, Miles M. Yang and Yanzhao Tang

This study explores the impact of owner chief executive officers' (CEO) narcissism on the exporting small to medium-sized enterprises' (SMEs) decision-making on the…

Abstract

Purpose

This study explores the impact of owner chief executive officers' (CEO) narcissism on the exporting small to medium-sized enterprises' (SMEs) decision-making on the international market expansion speed after their initial entry. Specifically, the authors use the mechanism of firms' international entrepreneurial orientation (IEO) to examine how owner CEO narcissism may influence SMEs' post-entry speed of internationalization (PSI), both directly and indirectly.

Design/methodology/approach

To test the hypotheses, the authors draw on data from a two-wave questionnaire and on archival export data from 291 Chinese exporting SMEs in three municipalities and 17 provinces from 2019 to 2020.

Findings

The results support the theoretical predictions that owner CEO narcissism shapes exporting SMEs' decisions on PSI, both directly and indirectly, through the mediation of firm-level IEO.

Originality/value

The study extends emerging research on the role of CEO narcissism in the upper echelons literature into the international marketing (IM) context. It also offers new insights into what drives exporting SMEs' IM decision-making from a psychological microfoundations perspective. Furthermore, the authors theoretically establish and empirically demonstrate the key role of a firm's IEO as a mediator to complement the existing literature's focus on the direct influence of CEO narcissism on firms' internationalization decisions.

Details

International Marketing Review, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0265-1335

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Article
Publication date: 29 November 2018

Lasse Torkkeli, Olli Kuivalainen, Sami Saarenketo and Kaisu Puumalainen

The purpose of this paper is to examine the impact of institutional environment on the international performance of small- and medium-sized enterprises (SMEs) and how this…

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1882

Abstract

Purpose

The purpose of this paper is to examine the impact of institutional environment on the international performance of small- and medium-sized enterprises (SMEs) and how this relationship is influenced by network competence.

Design/methodology/approach

This study uses a quantitative approach. In total, 119 internationally operating Finnish SMEs from five industry sectors are sampled via a cross-sectional survey. Data are analysed through regression modelling.

Findings

The international performance of SMEs is influenced directly and indirectly by institutional drivers. The results show that network competence mediates the positive relationship between institutional drivers and international performance.

Research limitations/implications

Network capability development can help SMEs leverage more or less favourable institutional environments for successful internationalisation. Perceived institutional drivers directly result in higher performance, but the effect can be partially mediated by dynamic capabilities. The limitations of the study include its single-country context and the cross-sectional nature of the data.

Practical implications

SMEs should take their home countries’ institutional environments into account, but for long-term success, they should develop the ability to manage their business networks. A conducive institutional environment may help develop competence, which in turn can enable more successful internationalisation in terms of scale, scope and satisfaction.

Social implications

Decision-makers may benefit from knowing that, in addition to capabilities, an institutionally conducive environment that drives domestic SMEs towards international markets may be an antecedent of successful internationalisation in the SME sector.

Originality/value

This is one of the few studies to illustrate how network capabilities can mediate the influence of institutional factors on entrepreneurial internationalisation. It combines institutional theory and the dynamic capabilities view to explain successful SME internationalisation.

Details

International Marketing Review, vol. 36 no. 1
Type: Research Article
ISSN: 0265-1335

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Article
Publication date: 19 October 2012

Francis Aboagye‐Otchere and Juliet Agbeibor

The purpose of this paper is to assess the suitability of the International Financial Reporting Standard for Small and Medium‐sized Entities (IFRS for SMES) for small…

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3637

Abstract

Purpose

The purpose of this paper is to assess the suitability of the International Financial Reporting Standard for Small and Medium‐sized Entities (IFRS for SMES) for small businesses (micro entities and SMEs) in Ghana by assessing their need for the IFRS for SMEs and the appropriateness of the IFRS for SMEs as the accounting standard of choice for small businesses in Ghana. The paper also aims to investigate the firm characteristics likely to influence small businesses' need for the Standard and the appropriateness of the Standard for small businesses.

Design/methodology/approach

The survey method was used. A questionnaire survey of 305 small businesses was conducted, from which 149 useable questionnaires were returned.

Findings

It was found that small businesses in Ghana have limited international structures and activities which do not result in a need for internationally comparable financial reporting information. Small businesses also do not receive requests to provide such information. In total, 19 of the 27 issues addressed by the Standard and assessed in the study were found to be irrelevant to small businesses in Ghana. Size, legal form and number of owners influence the suitability of the Standard for small businesses in Ghana.

Originality/value

The paper provides some of the early empirical evidence on the final version of the IFRS for SMEs in Africa. The study also brings a fresh perspective by applying institutional theory to the adoption and implementation of the IFRS for SMEs.

Details

Journal of Financial Reporting and Accounting, vol. 10 no. 2
Type: Research Article
ISSN: 1985-2517

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Article
Publication date: 28 June 2021

Nisansala Wijekoon, Grant Samkin and Umesh Sharma

This paper aims to extend the literature by examining the need for International Financial Reporting Standards (IFRS) for Sri Lankan small and medium entities (SMEs) and…

Abstract

Purpose

This paper aims to extend the literature by examining the need for International Financial Reporting Standards (IFRS) for Sri Lankan small and medium entities (SMEs) and investigating the institutional pressures that drove the adoption of the IFRS for SMEs in a developing country, Sri Lanka.

Design/methodology/approach

The theoretical framework adopted in this study draws on insights from new institutional sociology theory. An interview-based qualitative research was conducted with accountants and owners of SMEs, representatives from government agencies and the accounting standards-setting authority of Sri Lanka.

Findings

The emphasis on the need for international accounting standards for SMEs due to international structures and activities is not a priority for Sri Lankan SMEs. Sri Lankan SME owners do not receive requests to provide internationally comparable financial statements from their trade partners and international activities such as foreign exports, borrowings and ownerships are irrelevant business activities for them. Hence, findings reveal that the decision to adopt the IFRS for SMEs was in response to institutional pressures rather than alleged benefits of internationally comparable financial information. It appears from the results that the influence of local users’ needs and the government interference on the development of accounting standards does not exist in Sri Lanka.

Research limitations/implications

The research is limited to a single country. The data were collected from SMEs in Sri Lanka, as intended by the research boundary.[AQ1] The study has implications for policy makers, and standard setters charged with developing and implementing an appropriate financial reporting framework for SMEs.

Originality/value

The extant literature on IFRS for SMEs is sparse and mostly conducted through questionnaire surveys with a single user group of SME financial information.

Details

Meditari Accountancy Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2049-372X

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Book part
Publication date: 11 November 2014

M. H. Bala Subrahmanya

This paper probes the factors which influence (i) the degree of internationalization and (ii) the subsequent economic performance, achieved by SMEs in India. These two…

Abstract

Purpose

This paper probes the factors which influence (i) the degree of internationalization and (ii) the subsequent economic performance, achieved by SMEs in India. These two objectives have been examined in the context of firm level push/pull factors, barriers/challenges, firm resources, and strategy.

Design/methodology/approach

This study is based on empirical data gathered through a semi-structured questionnaire from 84 exporting SMEs in the (most internationalized) engineering industry of Bangalore in India during January 2012 to February 2013. The two key research questions have been analyzed using stepwise multiple regression models. The degree of internationalization is defined as the percentage of foreign sales in total sales turn over, as of 2010/2011, and economic performance is represented by (i) the value of sales turnover as of 2010/2011, and (ii) growth of sales turnover from inception till 2010/2011, alternatively. Firm level variables (age of firms, firm size, nature of firm organization), entrepreneurial characteristics (age of the founder and education), time taken to enter the export market for the first time, mode of entry, degree of initial internationalization, years of experience in the international market, whether operated in the international market continuously or not, number of markets currently exported, and number of learnings made are used as the possible explanatory factors for the first objective. In addition, current degree of internationalization is used as the possible explanatory factor for the current level of economic performance whereas initial degree of internationalization for the growth of sales turnover.

Findings

It is firm age, size and experience, and education of the CEO which influenced the degree of internationalization of SMEs. In addition, continuous operation in the international market after an early entry, leading to more learnings positively influenced the degree of internationalization. Further, those who adopted the MNC route as the mode of entry achieved a higher degree. However, what is more significant is the degree of initial internationalization achieved by the SMEs which had strongly influenced its current degree of internationalization. All these bring out that (i) firm level resources & competence and (ii) firm level strategy, together significantly contributed to the degree of internationalization achieved by the SMEs in an emerging economy like India. However, the degree of internationalization had a negative influence on the current sales turnover achieved. Whereas those SMEs, older in age, organized as private limited companies and led by more qualified CEOs, which catered to more number of countries could achieve a higher sales turnover. But degree of internationalization did not have any influence on firm growth. Only younger and smaller firms grew faster than older and larger firms, irrespective of the degree of internationalization.

Research implications

The above results bring out that to achieve a larger firm size, entering the international market need not be the only route, in the current era of globalization. It is possible to achieve a higher economic performance even with a domestic market focus, especially when the domestic market is registering a higher growth compared to the international market.

Originality

The degree of internationalization and its impact on the economic performance of SMEs have been hardly probed adequately based on empirical data in the context of emerging economies. This study fills this void. It reveals that in the era of globalization where domestic firms might have to face competition though not as much as those which operate in the international market, a larger firm size can be achieved with larger focus on the domestic market and with limited focus on the international market.

Details

Emerging Market Firms in the Global Economy
Type: Book
ISBN: 978-1-78441-066-7

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