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Internationalization Patterns of Chinese Private Owned SMEs: Initial Stages of Internationalization and Cluster as Take Off Node
University of Kalmar, Baltic Business School.
2009 (English)In: Research on Knowledge, Innovation and Internationalization / [ed] Larimo, J. and Vissak, T., Bingley: Emerald Group Publishing Limited , 2009, p. 89-114Chapter in book (Other academic)
Abstract [en]

Purpose – To describe and analyze the situation prior to and during the initial stages of internationalization of Chinese SMEs, as well as analyzing the role of clusters as take-off nodes for such firms.

Methodology – A multiple case study is conducted based on semistructured interviews with five private-owned exporting Chinese SMEs. Also, data on Chinese industrial clusters are analyzed.

Findings – The findings complement the model presented with new knowledge. In the take-off situation, Chinese SMEs deviate from assumed paths due to disadvantages in the emerging Chinese market. In the initial stages of internationalization, the focus on indirect exports hinders the building of international relationships being the key for further international expansion. Cluster localization is a take-off node for individual dedicated exporters into international markets.

Research limitations – Few cases, co-location of firms in the advanced Yangtze River Delta region and issues of Chinese versus Western SME definitions limits the possibility to generalize the findings of the study.

Practical implications – Chinese as well as foreign firms can gain from this paper regarding, for example, that competitiveness built up abroad can be utilized for increasing the market share in an attractive domestic market, the pitfall of indirect exports can be overcome by developing direct international relationships, and cluster localization can spur the internationalization of (individual) Chinese SMEs.

Originality – Empirical contribution of internationalization patterns of Chinese private-owned SMEs as well as pinpointing the importance of the domestic market as trigger for internationalization.

Place, publisher, year, edition, pages
Bingley: Emerald Group Publishing Limited , 2009. p. 89-114
Series
Progress in international business research, ISSN 1745-8862 ; 4
National Category
Business Administration
Research subject
Economy, Business administration
Identifiers
URN: urn:nbn:se:lnu:diva-4210DOI: 10.1108/S1745-8862(2009)0000004009ISBN: 978-1-84855-957-8 (print)ISBN: 978-1-84855-956-1 (print)OAI: oai:DiVA.org:lnu-4210DiVA, id: diva2:313850
Note
Nummer: Available from: 2010-04-27 Created: 2010-04-27 Last updated: 2012-02-27Bibliographically approved
In thesis
1. Internationalization processes of small and medium-sized enterprises: Entering and taking off from emerging markets
Open this publication in new window or tab >>Internationalization processes of small and medium-sized enterprises: Entering and taking off from emerging markets
2012 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

The high economic growth of formerly closed markets such as China, Russia, Poland, and the Baltic states has created vast business and growth opportunities for small and medium-sized enterprises (SMEs). Although this international business expansion of SMEs occurs in highly dissimilar business contexts and fierce international competition, it remains overlooked by research. Therefore, the main aim of this thesis is to contribute to an enhanced understanding of internationalization processes of SMEs by studying the overarching research question: What are the main features of internationalization processes of SMEs in an emerging market context? Three sub-problems are researched with regard to SMEs entering and taking off from emerging markets, as well as differences and similarities between these processes, in order to identify what features characterize them. Empirically, two surveys of 116 and 203 Swedish SMEs, respectively, with experiences of entry into emerging markets were conducted through standardized questionnaires via mail and on-site visits. In addition, case studies were conducted through interviews and observations of five internationalizing Chinese SMEs and four Chinese wholesale and retail market platforms. Five essays are compiled within the thesis and major findings and conclusions provide theoretical and empirical contributions to research on the internationalization processes of SMEs. With regard to the overlooked internationally experienced manufacturing SMEs from mature markets such as Sweden, theoretical advancements are made identifying the main concepts of their entry into emerging markets: entry node (the establishment point into the foreign business network); market-specific experiential knowledge; and perceived institutional distance. With regard to the internationally novel Chinese SMEs, these were seen to diverge from traditional internationalization paths. Indications were found of a parallel expansion abroad and at home, even using foreign markets as a springboard for further growth at home. The take-off node concerns the departure from an emerging home market, where a paradox of knowledge was found: the use of indirect export via a domestic intermediary facilitates the take off, but hinders further international expansion since no international experience or relationships are built up. Moreover, institutional distance was reduced due to collective internationalization through co-locating abroad. Generally, degree of maturity of the home market; as well as degree of internationalization and type of firm; are the main features behind differences between internationalization processes of SMEs in an emerging market context.

Place, publisher, year, edition, pages
Växjö, Kalmar: Linnaeus University Press, 2012. p. 272
Series
Linnaeus University Dissertations ; 78/2012
Keywords
network approach to internationalization, foreign business networks and relationships, internationalization process, foreign market entry, entry/take-off node, experiential knowledge, institutional distance, emerging markets, Sweden, China, small and medium-sized enterprises (SMEs)
National Category
Social Sciences
Research subject
Economy, Business administration; Economy, Marketing
Identifiers
urn:nbn:se:lnu:diva-17726 (URN)978-91-86983-35-2 (ISBN)
Public defence
Ny200, Ekonomihögskolan, Kalmar Nyckel, Kalmar (Swedish)
Opponent
Supervisors
Available from: 2012-02-27 Created: 2012-02-22 Last updated: 2013-11-07Bibliographically approved

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