Absorptive capacity and internationalization of New Zealand high-tech SMEs in the agro-technology sector

This study investigates the relationships between firm's technology, absorptive capacity and the internationalization process in the high-tech SMEs. The research identifies the most influential factors that affect the international activities and expansion decisions of New Zealand high-tech SMEs with core capabilities in agro-technology. Mixed methods, qualitative and quantitative elements in the data collection and analysis, were employed in this research for a reason that a deeper understanding of the research subject and the analysis of complex issues such as the internationalization process and absorptive capacity required methodological variety. The use of qualitative and quantitative methods took place in parallel. Both methods were used to study the same subject but they had specific objective related purposes and they offered the possibility of developing rich empirical data as well as a more comprehensive understanding of the subject under the study. The findings show that it is absorptive capacity that explains internationalization process, not internationalization process that explains absorptive capacity. The practice of internationalizing is as much a reflection of a firm's absorptive capacity as it is its determinant. The research identifies that high-tech SMEs possess technological and non-core absorptive capacity which in a different way influence firms' strategies. The research suggests that firm's technological capabilities and the advantage of specialized knowledge along with their limited non-core absorptive capacity act as constraints to the development of the future international strategy in high-tech SMEs. The study expands the existing literature on internationalization by developing variables for evaluating absorptive capacity in firms. This helped develop an absorptive capacity model which can be used as a valuable tool for self-assessment by firms to facilitate gaining insight towards further growth and development. The research suggested that if firms were able to measure its absorptive capacity this may result in improved business activities and enhanced presence in the world market. The results of this study should encourage firms to identify, capture and articulate knowledge achieved by their ventures. Managers must develop and nurture skills that ensure effective integration of learning as their firms expand, particularly internationally. These findings and absorptive capacity model offered as a tool should encourage managers to explore when, where, and how to best use firm's resources in the business operations. This is particularly important in regards to the research context (high-tech SMEs) where scientists are managers as well

International Entrepreneurship: An Introduction, Framework and Research Agenda

This paper provides an introduction into the field of international entrepreneurship. A definition of international entrepreneurship and associated key concepts is given and the research domain of international entrepreneurship is described. A substantial part of the international entrepreneurship literature concentrates on the internationalization of small and medium-sized enterprises (SMEs) and new ventures. Based on an analysis of the existing literature the current paper provides a framework for the study of antecedents and outcomes of SME and new venture internationalization and presents a number of avenues for future research.

Knowledge assimilation processes of rapidly internationalising firms: longitudinal case studies of Scottish SMEs

<p>Purpose – The accumulation of knowledge and learning by firms has been identified as being critical to their internationalisation. This paper aims to explore the knowledge assimilation processes of rapidly internationalising small to medium-sized enterprises (SMEs).</p> <p>Design/methodology/approach – This is a qualitative enquiry in two stages. First, four case studies were selected from firms that were participating in an internationalisation programme run by Scottish Enterprise, the regional development agency. Data collection involved semi-structured interviews with chief executive officers (CEOs) and programme providers, and archival data. Second, two focus groups were held with six CEOs participating in the programme.</p> <p>Findings – The findings indicate that knowledge sharing is important for rapidly internationalising SMEs and that firms adopted high levels of formality in assimilating knowledge. Two key aspects of formality were identified as important; formal planned events to share explicit and tacit knowledge and the codification of tacit to explicit knowledge. Knowledge may be assimilated less formally by the retention of tacit knowledge as tacit, while utilising elements of formality. The paper finds that learning for internationalisation can be transferred to support domestic growth.</p> <p>Practical implications – It is important for firms to develop appropriate knowledge assimilation processes within their management systems to support internationalisation. The CEO and management team need to take the lead in marshalling commitment to learning processes and in cultivating an organisational culture that is supportive of learning.</p> <p>Originality/value – This research contributes to international entrepreneurship by providing insights into the knowledge assimilation processes employed by rapidly internationalising SMEs to manage the tensions between the need for greater formality to be efficient at learning, and informality to enable speedy decision making.</p&gt

Supporting Exports in Small and Medium-Sized Enterprises

The book “Supporting Exports in Small and Medium-Sized Enterprises” provides a significant insight into the internationalization of economic operations of small and medium-sized enterprises, focusing in particular on exports, which can benefit from support instruments and schemes co-financed with public resources. Considerations center around the role of the SMEs in the economy, their internationalization and economic premises of an export promoting policy. An attempt is made to assess the system of State aid in Poland in the light of the EU regulations. The final part provides an overview of institutions and instruments which, to a lesser or greater extent, contribute to the internationalization of small and medium-sized enterprises.In summing up the considerations of the study devoted to the support to export activities of small and medium-sized enterprises we may formulate the following conclusions: 1. Small and medium-sized enterprises play an important role in the economy and contribute to the GDP, improved competitiveness and higher employment. 2. SMEs represent a rather high growth dynamics although limited with many economic, administrative and legal factors. 3. Enterprises may grow as a result of expansion consisting in winning new markets, also abroad, i.e. by intensification of cooperation with abroad, e.g., by the exchange of goods and services, which may enhance the growth of a business and improve its competitive position. 4. Export is the most frequent form of SMEs’ internationalisation. 5. Increased engagement of businesses in internationalisation calls for a range of activities that would support the involvement of the sector with foreign markets. 6. There are numerous empirical studies, which demonstrate that many states support export activities. At the same time we should stress positive correlation between export-promoting policy and economic growth. 7. State aid rules and provisions offer preferential treatment to small and medium-sized enterprises compared to large companies and ensure their access to numerous assistance schemes and higher intensity of aid. 8. Relatively friendly regulations and easy access to EU resources have resulted in almost 60% of total State aid in Poland being addressed to small and medium-sized enterprises. 9. Surveys demonstrate that various support instruments addressed to small and medium-sized enterprises may enhance their growth and foster their competitive position in international markets. 10. Enterprises in Poland may benefit from many types of support to their export activities. They include investment, information and promotional measures, which target mainly small and medium-sized enterprises.The publication was financed from the grant for research or development works and associated activities, which is designed to contribute to the development of young researchers and from own resources of the Department of International Trade of the University of Łódź

Entrepreneurial Career Capital, Innovation and New Venture Export Orientation

This paper explores the role of entrepreneurial human capital, entrepreneurial social capital and innovation in explaining new ventures' levels of export orientation. We use Global Entrepreneurship Monitor data from 9,342 early-stage venture entrepreneurs in 36 countries. Our results suggest that both entrepreneurial human capital and entrepreneurial social capital are important in explaining new ventures' export orientation. Entrepreneurial human capital increases the probability for new ventures to offer new products or services. New ventures with unique products or services are more likely to export, indicating that entrepreneurial human capital both has a direct positive relationship with new ventures' export and an indirect positive relationship through the venture's new product or service offerings. We also find that compared to moderate exporters, new ventures with higher export orientation levels are more likely to possess entrepreneurial human and entrepreneurial social capital and to be more innovative.

Overcoming Resource-Constraints through Internationalization? An Empirical Analysis of European SMEs

Previous research has indicated that firms can use internationalization as a strategy to access or build up resources. Such a strategy may be of particular interest or even necessary (for example to survive or grow) for firms that lack specific resources. Based on resource dependency theory and the model for entrepreneurial internationalization this paper investigates whether resource scarcities in terms of labor, finance and technology increase the likelihood for small and medium-sized enterprises (SMEs) to aim to access or accumulate these specific resources through internationalization. A number of hypotheses are tested using firm-level data from the ENSR Enterprise Survey 2003 for 7,673 SMEs located in 18 European countries. The results indicate that perceived resource constraints in terms of labor and finance spur SMEs to undertake international activities with the aim to access or accumulate labor, respectively finance. It is also found that among internationally active SMEs perceived constraints in terms of labor, finance and new technology increase the probability of SMEs using their international activities as a means for accessing or acquiring these scarce resources.

Indirect Internationalization of New Ventures: A Development And Test of Two Theories

This paper develops resource dependency and institutional theory arguments for explaining SME involvement in direct and indirect (via intermediaries) export activity. Based on resource dependency theory, we argue that a desire to leverage resources in a favorable home market may explain SME direct and indirect export activity. Building on institutional theory, we argue that SMEs operating in an organization field that is perceived as becoming more international will be more likely to export, either directly or indirectly. The theory arguments are tested using a sample of 871 Dutch SMEs. Results from binomial and multinomial logit regressions indicate the following: firms in the production industry are most likely to use export intermediaries, as are firm that face favorable home-country access to investors and banks and favorable home-country government regulations for businesses. In line with institutional theory arguments, firms are most likely to export, directly or indirectly, when the organization field is characterized by domestic competitors and customers who increasingly operate abroad and by an increased use of foreign suppliers. Compared to the direct mode, firms pursuing indirect modes are more likely to perceive favorable national finance market access and less likely to perceive favorable national production costs

SME Choice of Direct and Indirect Export Modes: Resource Dependency and Institutional Theory Perspectives

This paper develops and tests resource dependency and institutional theory arguments for explaining two choices facing SMEs: the decision to export or not, and, in case a firm has decided to export, the choice between exporting directly or indirectly. We test four hypotheses using a sample of 871 Dutch SMEs and applying multinomial and binomial logistic regression analysis. Our results suggest that institutional theory perspectives may be mainly relevant in explaining the choice of whether or not to export, while resource dependency theory arguments may be particularly relevant in explaining the choice between direct and indirect export modes. Our findings have important implications for policy and research

Internationalization and Performance: findings from a set of Italian SMEs

The relationship between Internationalization and performance is a challenging topic for the agenda of researchers across the world, due to the complexity of the variables involved, to the difficulties in construct building and, last but not least, to the controversial results arising from the different studies that have been conducted on the matter in recent decades. This is particularly true in the case of SMEs, which represent a field still to be explored from this point view. The fundamental hypothesis that has driven the present work is that the growing level of market integration has generated a framework of international competition for economic actors which has to be considered as the actual natural environment both for international and for domestic firms. As a consequence, being international is no more than a natural status for the enterprise, in the sense that firms which have not engaged yet in international markets are also part of a competitive international environment that influences strategic decisions and contributes to shaping business models and performances accordingly. This concept applies immediately to those regions where the integration process has gone further and deeper, for example the European Union area, where the domestic market for economic actors has gradually evolved from the former national base to a European one. The empirical study, based on 220 Italian firms, performance - measured by profitability ratios - is not determined by the degree of internationalization in terms of classical export intensity and number of international agreements, but depends mainly on the ability of firms to gain access to specific markets such as the American one. Moreover, SMEs which have grown in foreign markets through FDI show a lower profitability, showing the existence of a "liability of foreignness" effect at the beginning of their international growth. Howeverthis negative effect can be reduced when SMEs have already developed international competences and knowledge through an intense export activity.SMEs, internationalization, exporting, foreign direct investment