Contextualization of Evolving Patterns in the Internationalization of Small Firms

Abstract: The internationalization of SMEs has been recognized as one of the important paths to growth in SMEs. However, internationalization is also a resource and competence-demanding process. This is especially true for smaller-sized SMEs – the small and micro-sized firms – which have a large resource constraint, making internationalization even more challenging. Although this group of small firms counts for an average of over 98% of the total population of enterprises in EU countries, extant research on the internationalization of this group is still limited. Therefore, the main purpose of this dissertation is to contribute to a better understanding of evolving patterns of internationalization in the smaller-sized SMEs.The study uses emerging market entry along the internationalization of small firms as a context to probe the dynamics of perceived risk (uncertainty) and perceived opportunity in different foreign markets which influence the important decisions of small firms during their internationalization. The main study takes a longitudinal approach and uses mixed methods to investigate the features in both the initial period and the continued period of internationalization. It mainly builds on a multiple-case study of 12 Swedish firms, which have/had emerging market entry experience and/or involvement. This study illustrates influences from the environmental, organizational and individual levels on evolving patterns of internationalization in the investigated firms.This dissertation concludes that critical decisions and actions taken in the internationalization process depend on interactions among the influence and resources from the three levels. Such interactions form a conditional preference on perceived risk (uncertainty) and perceived opportunity during the internationalization of small firms. The study further proposes that the dynamics in the internationalization process are caused by a prospect-guided change mechanism.This dissertation contributes to the literature by: differentiating patterns of internationalization; enriching the study of “born global” in the continued period of internationalization; introducing a new perspective on the interpretation of dynamics in the internationalization; and increasing the understanding on the interactions of resources from three levels on the internationalization of small firms.