The McGill International Entrepreneurship series
Edited by Marian V. Jones and Pavlos Dimitratos
Chapter 6: Is the Globe Becoming Small or is the Small Becoming Global?
Globalization and internationalizing SMEs Niina Nummela INTRODUCTION Globalization has become a buzzword of everyday life, particularly from the viewpoint of business. Usually, as in this study, it refers to the changes in the way nations, regions, organizations, groups and individuals interact across national borders (Rondinelli and Behrman, 2000). This development is due to the increasing interdependence of markets and production in various countries through trade in goods and services, cross-border ﬂows of capital and exchange of technology (Nunnenkamp et al., 1994). As a result, it is expected that the importance of borders and boundaries will decrease (Knight, 2000; Parker, 1996) and new linkages, structures and relationships will take the place of the traditional ones in the world economic system (Acs and Yeung, 1999). The phenomenon as such is not new. This development has continued since the eighteenth century, as Kindleberger (2000) points out in his article on the roots of globalization. Globalization is indeed an ongoing process, but the pace varies. Political decisions and crises, such as major wars, have impeded it, whereas recent technological developments have stimulated it notably. In addition to the macroeconomic interpretation of globalization, the concept has also been applied on a company level for diverse purposes. Levitt (1983) used the term 20 years ago when arguing that national and regional preferences are disappearing and that the world will become a single marketplace. At that time the discussion led to the debate on company strategies and whether the ﬁrm should standardize or differentiate its operations on...
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