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Speed of SME Internationalization and Performance

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Abstract

This paper studies the performance consequences of the speed of SME internationalization. The authors identify three research gaps: few studies treat speed as an independent variable; most studies analyze speed only until internationalization starts; and, finally, studies have paid little attention to the multidimensionality of the speed concept. The authors seek to address these gaps and to contribute to the literature on the dynamics of internationalization by developing three measures of internationalization speed, which capture its multidimensionality. Building on the theories of learning advantage of newness and time compression diseconomies, the study presents three hypotheses on speed’s effect on performance, and the theoretically derived research model is tested on a sample of 183 SMEs visited on site. The analysis demonstrates that the speed of a firm’s increase in the breadth of its international markets has a positive but curvilinear effect on firm performance. It also demonstrates that the speed of a firm’s increase in commitment of foreign resources has a negative but curvilinear effect on the performance of the firm. These results have implications both for scholars interested in the dynamics of firm internationalization and for SME managers.

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Notes

  1. We reviewed the literature using Web of Science and searched for empirical articles from 1994 to 2014. We used the following keywords to capture internationalization speed: rapid, accelerated, pace, and speed; these were combined with keywords such as foreign market entry, international expansion, and internationalization. As the focus is on SME internationalization, articles on firms other than SMEs were excluded.

  2. For five of the cases we could not access reliable data on the foundation year. When testing the hypotheses we performed analyses both with the ‘replace with mean’ alternative and the ‘delete listwise’ alternative. In the manuscript we report on former results. The reason is that the ‘delete listwise’ alternative returned with significance levels at 5.2 and 5.3 % for the curvilinearity tests.

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Acknowledgments

The authors would like to express their gratitude to Jan Wallanders and Tom Hedelius research funds for their financial support for the data collection. The authors also would like to thank Susanne Sandberg for her support in the data collection process. The anonymous reviewers in Management International Review have significantly improved the paper thanks to their insightful and constructive comments.

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Authors and Affiliations

  1. School of Business and Economics, Linnaeus University, Kalmar, Sweden

    Mikael Hilmersson

  2. School of Business and Engineering, Halmstad University, Halmstad, Sweden

    Mikael Hilmersson

  3. Department of Social Sciences, Business Administration, Mid Sweden University, Sundsvall, Sweden

    Martin Johanson

  4. Department of Business Studies, Uppsala University, Uppsala, Sweden

    Martin Johanson

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  1. Mikael Hilmersson
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Correspondence to Mikael Hilmersson.

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Hilmersson, M., Johanson, M. Speed of SME Internationalization and Performance. Manag Int Rev 56, 67–94 (2016). https://doi.org/10.1007/s11575-015-0257-4

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