The Internationalization of New and Small Firms: A Resource-Based View

Abstract:     
Despite a growing awareness of the internationalization of small- and medium-sized enterprises (SMEs), there is still insufficient knowledge about this topic. The authors focus on the following issues: (1) characteristics of principal founders, businesses and the external environment influencing the firm's capacity as exporter or importer; (2) whether exporting firms are larger than in size than non-exporting firms; (3) whether exporting firms have a better performance than their counterparts; and (4) whether exporting firms are more likely to survive than non-exporting firms. A dichotomous exporting variable (whether a firm exports sales or not) and an export intensity variable (proportion of sales exported) are used. The sample of 621 manufacturing, construction, and service businesses in 12 contrasting environments in Great Britain is presented, first surveyed in 1990-91, and re-interviewed in 1997. A theoretical review, derived testable hypotheses, and performance and size indicators are described. Four categories of human and financial capital are examined: general human capital resources, the principal founder's know-how, the principal founder's specific industry know-how, and the principal founder's ability to acquire financial capital. Logistic regression analysis is used to determine a combination of variables (collected in 1990-91) that best predicted whether a firm would be an exporter or non-exporter seven years later. Businesses with older principal founders, with more resources, denser information and contact networks, and substantial management know-how are more likely to be exporters. Similarly, businesses whose principal founders had industry-specific knowledge are also more likely to be exporters. Businesses in the service sectors and those in urban area are less likely to be exporters. Such results will equip policy-makers and practitioners with insights into the key resource-based factors associated with the decision (by new and small independent firms) to export sales abroad. (CBS)

Keywords: Experimental/primary research, Startups, Operator ownership, Social capital, Exports & imports, Capital, Human capital

Accepted Paper Series