Skip to main content
SpringerLink
Log in

A dynamic perspective to the internationalization of small-medium enterprises

  • Published:
Journal of the Academy of Marketing Science Aims and scope Submit manuscript

Abstract

Despite the fact that the dominant theories of the internationalization of small-medium enterprises (SMEs) prescribe a dynamic and evolutionary process for the firm, most of the empirical research on this topic has been based on in-depth studies of a few cases, or cross-sectional surveys, which cannot capture the dynamic nature of exporting decisions that occur over many years. In this study we propose an empirical framework for studying the internationalization of SMEs that: (a) identifies latent internationalization stages based on multiple indicators of the firms’ engagement and strategies in foreign markets over multiple years, and (b) analyses the firms’ movements among these latent states over time, as a function of main characteristics of the firms and their markets at each point in time.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

Notes

  1. Most of the firms showing more than 500 employees at some point during the sampling period actually entered the sample with fewer than 500 workers.

References

  • Aharoni, Y. (1966). The foreign investment decision process. Boston: Graduate School of Business Administration, Harvard University.

    Google Scholar 

  • Andersen, O. (1993). On the internationalization process of firms: a critical analysis. Journal of International Business Studies, 24(2), 209–231.

    Article  Google Scholar 

  • Anderson, E., & Gatignon, H. (1986). Modes of foreign entry: a transaction cost-analysis and propositions. Journal of International Business Studies, 17(3), 1–26.

    Article  Google Scholar 

  • Barkema, H. G., & Drogendijk, R. (2007). Internationalising in small, incremental or larger steps? Journal of International Business Studies, 38(7), 1132–1148.

    Article  Google Scholar 

  • Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99–120.

    Article  Google Scholar 

  • Barrett, N. J., & Wilkinson, I. F. (1986). Internationalisation behaviour: management characteristics of Australian manufacturing firms by level of international development. In P. W. Turnbull & S. J. Paliwoda (Eds.), Research in International Marketing (pp. 213–233). London: Croom Helm.

    Google Scholar 

  • Bartlett, C. A., & Ghoshal, S. (1989). Managing across borders: The transnational solution. Boston: Harvard Business School Press.

    Google Scholar 

  • Bartlett, C. A., Ghoshal, S., & Birkinshaw, J. (2003). Transnational management: Text and cases (4th ed.). Boston: Irwin/McGraw Hill.

    Google Scholar 

  • Beamish, P. W. (1990). The internationalisation process of smaller Ontario firms: A research agenda. In A. M. Rugman (Ed.), Research in global strategic management (pp. 77–92). Greenwich: JAI Press.

    Google Scholar 

  • Bell, J. (1995). The internationalisation of small computer software firms: a further challenge to “Stage” theories. European Journal of Marketing, 29(8), 60–75.

    Article  Google Scholar 

  • Bell, J., Mcnaughton, R., Young, S., & Crick, D. (2003). Towards an integrative model of small firm internationalization. Journal of International Entrepreneurship, 1, 339–362.

    Article  Google Scholar 

  • Bell, J., Crick, D., & Young, S. (2004). Small firm internationalization and business strategy: an exploratory study of ‘knowledge-intensive’ and ‘traditional’ manufacturing firms in the UK. International Small Business Journal, 22(1), 23–56.

    Article  Google Scholar 

  • Benito, G. R. G., & Welch, L. S. (1997). De-internationalisation. Management International Review, 37(2), 7–25.

  • Bjorkman, I., & Kock, S. (1997). Inward international activities in service firms—illustrated by three cases from the tourism industry. International Journal of Service Industry Management, 8(5), 362–376.

    Article  Google Scholar 

  • Buckley, P. J., & Casson, M. (1993). Economics as an imperialist social science. Human Relations, 46(9), 1035–1052.

    Article  Google Scholar 

  • Buckley, P., & Ghauri, P. (2004). Globalisation, economic geography and the strategy of multinational enterprises. Journal of International Business Studies, 35(2), 81–98.

    Article  Google Scholar 

  • Caves, R. E., & Porter, M. E. (1978). Market structure, oligopoly and the stability of market shares. The Journal of Industrial Economics, 4, 289–313.

    Article  Google Scholar 

  • Cavusgil, S. T. (1982). Some observations on the relevance of critical variables for internationalization stages. In M. R. Czinkota & G. Tesar (Eds.), Export management: An international context (pp. 276–285). New York: Praeger.

    Google Scholar 

  • Cavusgil, S. T. (1984). Organizational characteristics associated with export activity. Journal of Management Studies, 21(1), 3–22.

    Article  Google Scholar 

  • Chang, S. J., & Rosenzweig, P. M. (2001). The choice of entry mode in sequential foreign direct investment. Strategic Management Journal, 22(8), 747–776.

    Article  Google Scholar 

  • Chetty, S. K., & Hamilton, R. T. (1996). The process of exporting in owner-controlled firms. International Small Business Journal, 14(2), 12–25.

    Article  Google Scholar 

  • Coviello, N. E., & Munro, H. J. (1997). Network relationships and the internationalization process of small software firms. International Business Review, 6(4), 361–386.

    Article  Google Scholar 

  • Coviello, N. E., & McAuley. (1999). Internationalisation and the smaller firm: a review of contemporary empirical research. Management International Review, 39(2), 223–257.

    Google Scholar 

  • Crick, D. (2004). UKSMEs’ decision to discontinue exporting: an exploratory investigation into practices within the clothing industry. Journal of Business Venturing, 19(4), 561–587.

    Article  Google Scholar 

  • Crick, D., & Jones, M. V. (2000). Small high-technology firms and international high-technology markets. Journal of International Marketing, 8(2), 63–85.

    Article  Google Scholar 

  • Cyert, R. M., & March, J. G. (1963). A behavioral theory of the firm. New York: Prentice Hall.

    Google Scholar 

  • Czinkota, M. R. (1982). Export development strategies: US promotion policies. New York: Praeger Publishers.

    Google Scholar 

  • Czinkota, M. R., & Ursic, M. L. (1987). A refutation of the psychic distance effect on export development. Developments in Marketing Science 10, 157–160.

    Google Scholar 

  • Dana, L.-P., & Wright, R. W. (2004). Emerging paradigms of international entrepreneurship. In L.-P. Dana (Ed.), Handbook of research in international entrepreneurship (pp. 3–15). Glos: Edward Elga Publishing.

    Google Scholar 

  • Douglas, S. P., & Craig, C. S. (2011). Convergence and divergence: developing a semiglobal marketing strategy. Journal of International Marketing, 19(1), 82–101.

    Article  Google Scholar 

  • Du, R., & Kamakura, W. A. (2006). Household lifecycles and life styles in America. Journal of Marketing Research, 43(1), 121–132.

    Article  Google Scholar 

  • EC (2007). Final report of the expert group on supporting the internationalization of SMEs. Brussels: Directorate-General for Enterprise and Industry of the European Commission.

  • Elliott, R. J., Aggoun, L., & Moore, J. B. (1995). Hidden Markov models: Estimation and control. Applications of Mathematics 29. New York: Springer-Verlag.

  • Ellis, P. D., & Pecotich, A. (1998). Export marketing: initiation and progress. Conference proceedings of the European Marketing Academy (EMAC) Conference, 2, 421–436.

    Google Scholar 

  • Fillis, I. (2001). Small firm internationalisation: an investigative survey and future research directions. Management Decision, 39(9), 767–783.

    Article  Google Scholar 

  • Gankema, H. G. J., Snuit, H. R., & van Dijken, K. A. (1997). The internationalisation process of small and medium sized enterprises: An evaluation of the stage theory. In R. Donkels & A. Miettinen (Eds.), Entrepreneurship and SME research: On its way to the next millennium (pp. 185–197). Aldershot: Ashgate Publishing Ltd.

    Google Scholar 

  • Hedlund, G., & Kverneland, A. (1983). Are entry strategies for foreign markets changing? The case of Swedish investment in Japan. Reprinted In: P. J. Buckley & P. N. Ghauri (Eds.) (1994). The internationalization of the firm, A reader (pp. 106–123) London: Academic Press Limited.

  • Jain, S. C. (1989). Standardization of international marketing strategy: some research hypotheses. Journal of Marketing, 53(1), 70–79.

    Article  Google Scholar 

  • Johanson, J., & Mattsson, L.-G. (1987). Interorganizational relations in industrial systems: a network approach compared with the transaction cost approach. International Studies of Management and Organization, 17(1), 34–48.

    Google Scholar 

  • Johanson, J., & Mattsson, L. G. (1992). Network positions and strategic action—an analytical framework. In B. Axelsson & G. Easton (Eds.), Industrial networks. A new view of reality. London: Routledge.

    Google Scholar 

  • Johanson, J., & Mattsson, L. G. (1993). The markets-as-networks tradition in Sweden. In: G. Laurent, G. L. Lilien, & B. Pras (Eds.), Research traditions in marketing (pp. 321–342).

  • Johanson, J., & Vahlne, J.-E. (1977). The internationalization process of the firm: a model of knowledge development and increasing foreign market commitments. Journal of International Business Studies, 8(1), 23–32.

    Article  Google Scholar 

  • Johanson, J., & Vahlne, J.-E. (1990). The mechanism of internationalisation. International Marketing Review, 7(4), 11–24.

    Article  Google Scholar 

  • Johanson, J., & Vahlne, J.-E. (2009). The Uppsala internationalization process model revisited: from liability of foreignness to liability of outsidership. Journal of International Business Studies, 40, 1411–1431.

    Article  Google Scholar 

  • Johanson, J., & Vahlne, J.-E. (2011). Markets as networks: implications for strategy-making. Journal of Academy of Marketing Science (in press).

  • Johanson, J., & Wiedersheim-Paul, F. (1975). The internationalization of the firm: four Swedish cases. Journal of Management Studies, 12(3), 305–322.

    Article  Google Scholar 

  • Kamakura, W. A., & Russell, G. J. (1989). A probabilistic choice model for market segmentation and elasticity structuring. Journal of Marketing Research, 26(4), 379–390.

    Article  Google Scholar 

  • Katsikeas, C. S., Samiee, S., & Theodosiou, M. (2006). Strategy fit and performance consequences of international marketing standardization. Strategic Management Journal, 27(9), 867–890.

    Article  Google Scholar 

  • Kim, C.-J., & Nelson, C. R. (1999). State-space models with regime switching: Classical and Gibbs-Sampling Approaches with Applications. The MIT Press.

  • Knight, G. A., & Cavusgil, S. T. (1996). The born global firm: A challenge to traditional internationalization theory. In: T. K. Madsen (Ed.) Advances in international marketing, 8 (pp. 11–26).

  • Kogut, B., & Singh, H. (1988). The effect of national culture on the choice of entry mode. Journal of International Business Studies, 19(3), 411–432.

    Article  Google Scholar 

  • Leonidou, L. C., & Katsikeas, C. S. (1996). The export development process: an integrative review of empirical models. Journal of International Business Studies, 27(3), 517–551.

    Article  Google Scholar 

  • Lim, J.-S., Sharkey, T. W., & Kim, K. I. (1991). An empirical test of an export adoption model. Management International Review, 31(1), 51–62.

    Google Scholar 

  • Madsen, T., & Servais, P. (1997). The internationalization of born globals: an evolutionary process? International Business Review, 6(6), 561–583.

    Article  Google Scholar 

  • Makhija, M. (2003). Comparing the resource-based and market-based views of the firm: empirical evidence from Czech privatization. Strategic Management Journal, 24, 433–451.

    Article  Google Scholar 

  • Mañez, J. A., Rochina, M. E., & Sanchís, J. A. (2004). The decision to export: a panel data analysis for Spanish manufacturing. Applied Economics Letters, 11(11), 669–673.

    Article  Google Scholar 

  • McAuley, A. (1999). Entrepreneurial instant exporters in the Scottish arts and crafts sector. Journal of International Marketing, 7(4), 67–82.

    Google Scholar 

  • McDougall, P. P., & Oviatt, B. M. (1996). New venture internationalization: strategic change and performance: a follow-up study. Journal of Business Venturing, 11, 23–40.

    Article  Google Scholar 

  • McDougall, P. D., Shane, S., & Oviatt, B. M. (1994). Explaining the formation of international new ventures: the limits of theories from international research. Journal of Business Venturing, 9(6), 469–487.

    Article  Google Scholar 

  • Melin, L. (1992). Internationalization as a strategy process. Strategic Management Journal, 13, 99–118.

    Article  Google Scholar 

  • Moon, J., & Lee, H. (1990). On the internal correlates of export stage development: an empirical investigation in Korean electronics industry. International Marketing Review, 7(5), 16–26.

    Article  Google Scholar 

  • Moon, S., Kamakura, W. A., & Ledolter, J. (2007). Estimating promotion response when competitive promotions are unobservable. Journal of Marketing Research, 44(3), 503–515.

    Article  Google Scholar 

  • Newbold, G. D., Buckley, P. J., & Thurwell, J. (1978). Going international. London: Associated Business Press.

    Google Scholar 

  • Oesterle, M.-J. (1997). Time spam until internationalization: foreign market mechanisms of innovation. Management International Review, 37(2), 125–149.

    Google Scholar 

  • O’Farrell, P. N., Wood, P. A., & Zheng, J. (1998). Regional influences on foreign market development by business service companies: elements of a strategic context explanation. Regional Studies, 32, 31–48.

    Article  Google Scholar 

  • Olivares-Mesa, A., & Suarez-Ortega, S. (2007). Factors affecting the timing of the export development process in Spanish manufacturing firms. Advances in International Marketing, 17, 89–105.

    Article  Google Scholar 

  • Oviatt, B. M., & McDougall, P. P. (1994). Toward a theory of international new ventures. Journal of International Business Studies, 25(1), 45–64.

    Article  Google Scholar 

  • Peteraf, M. A. (1993). The cornerstones of competitive advantage—a resource-based view. Strategic Management Journal, 14(3), 179–191.

    Article  Google Scholar 

  • Petersen, B., & Pedersen, T. (1997). Twenty years after: Support and critique of the Uppsala Internationalization Model. In M. Forsgren & I. Björkman (Eds.), The nature of the international firm. Handelshøjskolens Forlag: København.

    Google Scholar 

  • Porter, M. (1979). The structure within industries and companies’ performance. The Review of Economics and Statistics, 61, 214–227.

    Article  Google Scholar 

  • Rabiner, L. R. (1989). A tutorial on Hidden Markov models and selected applications in speech recognition. Proceedings of the IEEE, 77(2), 257–285.

    Article  Google Scholar 

  • Rao, T. R., & Naidu, G. M. (1992). Are the stages of the internationalization empirically supportable? Journal of Global Marketing, 6, 147–170.

    Article  Google Scholar 

  • Reid, S. D. (1983). Firm internationalization, transaction costs, and strategic choice. International Marketing Review, 1(2), 45–56.

    Article  Google Scholar 

  • Reynolds, P. D. (1987). New firms: societal contribution versus potential. Journal of Business Venturing, 2, 231–246.

    Article  Google Scholar 

  • Ruzzier, M., Hisrich, R. D., & Antoncic, B. (2006). SME internationalization research: past, present, and future. Journal of Small Business and Enterprise Development, 13(4), 476–497.

    Article  Google Scholar 

  • Sharma, D. D., & Blomstermo, A. (2003). The internationalization process of Born Globals: a network view. International Business Review, 12, 739–753.

    Article  Google Scholar 

  • Sharma, D. D., & Johanson, J. (1987). Technical consultancy in internationalization. International Marketing Review, 4(4), 20–29.

    Article  Google Scholar 

  • Sullivan, D., & Bauerschmidt, A. (1990). Incremental internationalisation: a test of Johanson and Vahlne’s thesis. Management International Review, 30(1), 19–30.

    Google Scholar 

  • Szymanski, D. M., Bharadwaj, S. G., & Varadarajan, P. R. (1993). Standardization versus adaptation of international marketing strategy: an empirical-investigation. Journal of Marketing, 57(4), 1–17.

    Article  Google Scholar 

  • Theodosiou, M., & Leonidou, L. C. (2003). Standardization versus adaptation of international marketing strategy: an integrative assessment of the empirical research. International Business Review, 12, 141–171.

    Article  Google Scholar 

  • Turnbull, P. W. (1987). A challenge to the stages theory of the internationalization process. In P. J. Rosson & S. D. Reid (Eds.), Managing export entry and expansion (pp. 21–40). New York: Praeger.

    Google Scholar 

  • Vermunt, J. K., & Magidson, J. (2005). Latent GOLD 4.0 User’s Guide. Belmont: Statistical Innovations Inc.

    Google Scholar 

  • Wedel, M., & Kamakura, W. A. (2000). Market segmentation: Conceptual methodological foundations (2nd ed.). Boston: Kluwer Academic Publishers.

    Google Scholar 

  • Weinzimmer, L., Nystrom, P., & Freeman, S. (1998). Measuring organizational growth: issues, consequences and guidelines. Journal of Management, 21(2), 235–262.

    Google Scholar 

  • Wernerfelt, B. (1984). A resource-based view of the firm. Strategic Management Journal, 5, 171–180.

    Article  Google Scholar 

  • Westhead, P., Wright, M., & Ucbasaran, D. (2001). The internationalization of new and small firms: a resource-based view. Journal of Business Venturing, 16(4), 333–358.

    Article  Google Scholar 

  • Westhead, P., Wright, M., & Ucbasaran, D. (2002). International market selection strategies selected by ‘micro’ and ‘small’ firms. Omega, International Journal of Management Science, 30(1), 51–68.

    Article  Google Scholar 

  • Wind, Y., Douglas, S. P., & Perlmutter, H. V. (1973). Guidelines for developing international marketing strategies. Journal of Marketing, 37(2), 14–23.

    Article  Google Scholar 

  • Wortzel, L. H., & Wortzel, H. V. (1981). Export marketing strategies for NIC and LDC-based firms. Columbia Journal of World Business, 16(1), 51–60.

    Google Scholar 

  • Wright, M., Westhead, P., & Ucbasaran, D. (2007). Internationalization of small and medium-sized enterprises (SMEs) and international entrepreneurship: a critique and policy implications. Regional Studies, 41(7), 1013–1029.

    Article  Google Scholar 

  • Yang, Y. S., Leone, R. P., & Alden, D. L. (1992). A market expansion ability approach to identify potential exporters. Journal of Marketing, 56(1), 84–96.

    Article  Google Scholar 

  • Zahra, S., Matherne, B. P., & Carleton, J. M. (2003). Technological resource leveraging and internationalisation of new ventures. Journal of International Entrepreneurship, 1, 163–186.

    Article  Google Scholar 

Download references

Acknowledgments

The Ministry of Education and Science of Spain have financed this research through the projects: SEJ2006-14369/ECON and ECO2009-13378.

Author information

Authors and Affiliations

  1. Fuqua School of Business, Duke University, Box 90120, Durham, NC, 27708, USA

    Wagner A. Kamakura

  2. Pablo de Olavide University, Ctra. De Utrera km 1, Seville, N.C. 41013, Spain

    María A. Ramón-Jerónimo

  3. Department of Business Administration and Marketing, University of Seville, Avda. Ramón y Cajal, 1, Seville, N.C.41018, Spain

    Julio D. Vecino Gravel

Authors
  1. Wagner A. Kamakura
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. María A. Ramón-Jerónimo
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Julio D. Vecino Gravel
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Wagner A. Kamakura.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Kamakura, W.A., Ramón-Jerónimo, M.A. & Vecino Gravel, J.D. A dynamic perspective to the internationalization of small-medium enterprises. J. of the Acad. Mark. Sci. 40, 236–251 (2012). https://doi.org/10.1007/s11747-011-0267-0

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s11747-011-0267-0

Keywords

Search

Navigation