The Effect of Strategic Orientation on the Speed of Internationalization in Small and Medium-sized Enterprises in South Korea

Abstract

This study demonstrates the impact of strategic orientation on internationalization speed in small and medium-sized enterprises (SMEs). The results of an empirical analysis on 206 SMEs located in the Gwangju and Jeonnam regions of South Korea are as follows. First, export orientation has a positive impact on the speed of internationalization in SMEs. This result suggests that export-oriented SMEs can increase internationalization speed by not only sharing and utilizing information about overseas markets, but also by showing higher export commitment. Second, innovation orientation does not have a significant effect on the speed of internationalization in SMEs. It is believed that general SMEs tend to have a relatively difficult time carrying out innovation activities or taking risks because they instead seek stability in environments of intense competition. Finally, relationship orientation is shown to have a positive influence on the speed of internationalization in SMEs. As preceding studies emphasize, these findings suggest that SMEs can supplement their limited resources and capabilities through inter-firm cooperation networks, which may shorten the time it takes to internationalize. This study identifies a link between strategic orientation in SMEs and the speed of internationalization, which is a relatively understudied area of existing literature. Furthermore, this study considers relationship orientation as a dimension of strategic orientation, which preceding studies do not explore.

Keywords: Export Orientation, Innovation Orientation, Relationship Orientation, Speed of Internationalization, Strategic Orientation

JEL Classification: F14, M16, M31, O31