Internationalization of SMEs: Building models for long-term development
The objective of this special issue is to advance our understanding on how small and medium-sized enterprises (SMEs) build firm-specific advantages (FSAs) after their internationalization, and what are the entrepreneurial actions that help them to sustain such competitive advantages over time. With the globalization and digitalization of business, SMEs are in a better position to detect opportunities to create and exploit resources in multiple countries with novel business models based on their flexibility. At the same time, we lack understanding of the drivers of long-term performance for SMEs (Cavusgil & Knight, 2015). This new landscape poses important challenges.
Dominant paradigms in international entrepreneurship (IE) literature have largely focused on describing their internationalization patterns, moving from the classical internationalization process (Johanson & Vahlne, 1977) to the phenomenon of accelerated internationalization (Oviatt & McDougall, 1994), and focusing on variables such as the speed and time for subsequent entries (Casillas & Acedo, 2013). Likewise, in most cases IE studies assume that internationalization occurs on the basis of a firm-specific advantage that existed before the internationalization process (Autio, 2017). Noticeably, this relates to the well-known OLI framework (Dunning, 1988) used to explain MNEs’ internationalization through the advantages associated with their existing operations. However, we have little understanding on how to build these advantages, especially in the case of SMEs. The literature has referred less to other possible approaches to handle this new reality, such as market presence and internationalization modes, and thus there is a certain misfit between the theoretical approaches and the reality of contemporary SMEs competing globally. For instance, we can observe a new generation of SMEs developing high-added value activities abroad (Dimitratos et al., 2016) making decisions about location and fine slicing of their value chain and creating differentiated networks just like MNEs (Buckley & Ghauri, 2004). These firms also benefit from establishing direct communication to customers abroad as a strategy central to their value proposition (Zott, Amit & Massa, 2011). In parallel, recent studies point to the need to understand the evolution of firm advantages over time (Reuber et al., 2017), and the dynamic component supporting the assimilation of foreign market opportunities and the reconfiguration of business models (Cosenz & Noto, 2017).
We encourage potential contributors to use less-explored frameworks such as opportunity-based view (Dimitratos et al., 2016), or dynamic capabilities perspective (Prange & Verdier, 2011; Villar, Alegre & Pla-Barber, 2014) among others. While it has been suggested that firm heterogeneity affects organizational learning for established and new ventures (Zahra, Sapienza & Davidsson, 2006), we lack explanations on how SMEs absorb and assimilate foreign market learning and manager’s decision making influence on this process of capability development as compared to studies in MNEs. Since managers experience difficulties in adapting their business routines when a change occurs in their industry or environment (Kim & Min, 2015), cognitive theories explaining decision making processes are also of particular interest (Ajzen, 1991). Furthermore, because IE studies are naturally biased towards a specific profile of SMEs, the importance of the context could be stressed to provide new insights (Reuber et al., 2017). Studies focusing on different technological and industrial settings (less knowledge intensive products, services vs. manufactures) are therefore welcome.
This BRQ special issue will consider conceptual as well as empirical papers with different theoretical perspectives and research methodologies. The main objective is to publish a well-balanced mix of papers with sound, robust and relevant contributions to the literature. We are particularly interested in papers that extend and modify our current understanding of theories by analyzing how SMEs in different contexts adapt their internationalization models to the new conditions of the global landscape. The following research questions represent some examples of topics that fit the special issue:
What is the role of dynamic capabilities for SMEs and how do they affect foreign market learning in the long-term? How is the tension between exploration and exploitation managed in international business?
Is there a suitable value chain configuration for value capturing in these firms, and how can it be upgraded (i.e., offshoring, delivery configuration connecting the firm to end users, etc.)?
What are the specific strategies and organizational routines that SMEs can use to identify and exploit value-capturing opportunities (i.e., entry modes or combination of entry modes, niche positioning etc.)?
How do contemporary SMEs cope with the liabilities of foreignness in regional and global markets? What is the role of distance (cultural, geographic, economic, etc.) and how does it affect their international expansion and survival?
What are the adaptations in business models that lead to long-term outcomes over time? How can we measure it?
How do governance decision impact on SMEs’ performance? Is there any difference between family firms and non-family firms?