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Internationalization of Small and Medium Sized Enterprises in the Baltic Sea Region
University of Kalmar, Baltic Business School. (Baltic Business Research Center)
University of Kalmar, Baltic Business School. (Baltic Business Research Center)
2008 (English)In: Journal of International Management, ISSN 1075-4253, E-ISSN 1873-0620, Vol. 14, no 1, p. 65-77Article in journal (Refereed) Published
Abstract [en]

 

We integrate internationalization process theory with industrial network theory to explain SME entry in emerging markets. We show that entry modes are complemented by entry nodes and entry processes. We develop a Five/Five Stages Model to consider the dynamic interaction between these factors. We undertook a survey of 116 SMEs in Southern Sweden trading with the Baltic States, Poland and Russia, as complemented by a case study of ten SMEs trading with Poland and an analysis of trade statistics of SMEs in Southern Sweden.

We find that relationships are critical for entry as most firms rely on direct relationships with customers or dyads. The involvement of subsidiaries is uncommon, suggesting a low degree of FDI. Meanwhile, triads or indirect relationships through distributors or agents are more important. This low cost entry node creates a paradox in that the insufficient learning it provides about local markets obstructs further internationalization. By relating entries to the global internationalization process, we find that most SMEs trade with few countries in the region, indicating a low degree of regional internationalization.

 

Place, publisher, year, edition, pages
Elsevier , 2008. Vol. 14, no 1, p. 65-77
Keywords [en]
Entry process, Regional and global internationalization processes, Network approach, Emerging markets, SMEs
National Category
Business Administration
Research subject
Economy, Marketing
Identifiers
URN: urn:nbn:se:hik:diva-967DOI: 10.1016/j.intman.2007.02.005OAI: oai:DiVA.org:hik-967DiVA, id: diva2:133276
Available from: 2009-01-08 Created: 2009-01-08 Last updated: 2017-12-14Bibliographically 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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Jansson, HansSandberg, Susanne

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