SME Internationalisation: Studies of Resource as Antecedents and Performance Outcomes

Abstract

The PhD thesis aims to promote a better understanding of the SMEs internationalisation process. The thesis consists of a systematic literature review and two empirical studies. I argue that resource elements, growth strategy, and other mechanisms constitute important determinants of the SME internationalisation process and subsequent firm performance. This thesis therefore, advances the literature on SME internationalisation, firm resource dependence as antecedents, and the performance outcomes in context of the globalisation process. Designed empirical models, such as controlled matching process and difference-in-differences estimation, have been employed to provide robust empirical evidence in this thesis. The systematic review of the literature on SME internationalisation and performance relationship provides a comprehensive examination of the research in this stream and, more importantly, identifies the inadequate theoretical arguments and empirical evidences that need to be addressed to advance the understanding of the field. This review develops a roadmap of future research areas for the exploration of the mechanisms that influence the SME internationalisation process and subsequent firm performance. The first empirical paper draws on the resource-based view, resource dependence theory, and international entrepreneurship literatures to investigate the relationship between SME resource position and internationalisation process. Empirical results suggest a linear positive relationship between high-discretionary slack and SME internationalisation, a U-shaped curvilinear relationship between low-discretionary slack and likelihood of FDI, as well as an inverse U-shaped relationship between knowledge intensity and internationalisation of SMEs. The second empirical paper looks at the effects of internationalisation on the firm’s subsequent performance. I argue that SMEs internationalisation is an entrepreneurial strategy that shapes these companies’ future business development. Regression results suggest that in the short term, FDI activities have a negative impact on firm profitability. In the long run, however, local resource exploitation leads to a superior performance of international SMEs compared with their domestic counterparts.