Innovation and Internationalization of Korean SMEs in the Textile and Footwear Industries

Abstract

Innovation has been recognized as one of the factors that enhances firm internationalization, a vital route for the growth and survival of small and medium enterprises. Thus, it is important to identify antecedents of firm innovation and their impacts on SME internationalization for their long-term success. Accordingly, the present study examined a model of SME internationalization in which the causal relationships among entrepreneurial orientation, absorptive capacity, innovation (product, process, and marketing innovation), and internationalization were proposed. Analyses of 156 survey data collected from Korean SMEs exporting textiles, apparel, and footwear revealed that entrepreneurial orientation and absorptive capacity appeared to function as significant antecedents of product and process innovation. Among three dimensions of innovation, only process and marketing innovation positively affected internationalization. The study provides practical implications by asserting the importance of process and marketing innovation to increase firm internationalization