Internationalization Strategy of Small and Medium-Sized Family Businesses: Some Influential Factors

Abstract

This study seeks to prove that family firms in Spainshow little interest in international expansion and to propose alternatives toincrease family firms' involvement in international markets.It ishypothesized that family-owned SMEs are less likely than nonfamily firms toachieve international expansion.Other hypotheses suggest that thepresence of second and subsequent generations in the family firm makesinternationalization more likely, as does the existence of alliances betweenthe family SME and other firms.Also, international involvement isexpected to become more likely when another company is a large-blockshareholder in the family firm. Data from 6,000 observations of family-owned manufacturing SMEs in Spain areused to test these hypotheses.These data span the period between 1991 and1999 and are derived from the Survey of Business Strategies(SBS).Analysis of the data confirms that family firms are less likelythan other SMEs to participate in international markets.It is also clearthat the second- and subsequent-generation family SMEs, as well as family firmsthat forge alliances with other firms and have another company as ashareholder, make more progress toward internationalization than do otherfamily firms. (SAA)

Keywords: Interfirm alliances, International expansion, Growth strategies, Firm size, Manufacturing industries, Family firms, Shareholders