The Changing Global Economy and its Impact on International Entrepreneurship

The Changing Global Economy and its Impact on International Entrepreneurship

The McGill International Entrepreneurship series

Edited by Hamid Etemad, Stefano Denicolai, Birgit Hagen and Antonella Zuchella

The Changing Global Economy and its Impact on International Entrepreneurship addresses different changes and challenges which small and medium sized enterprises (SMEs) face in an economy where they need to compete at home and cannot refrain from participating in international markets. This volume presents a collection of 12 carefully selected chapters that highlight challenging real-world cases to illustrate a variety of difficult problems. The book presents an analytical framework with three levels of analysis – entrepreneurial level, firm level, and institutional level – to document comprehensive, realistic and experientially-based entrepreneurial initiatives, potent firm and public policy strategies with solid results.

Chapter 8: How are knowledge acquisition and SMEs’ internationalization related? Empirical evidence from Gruppo Germani

Mirella Migliaccio and Francesca Rivetti

Subjects: business and management, entrepreneurship, international business


Internationalization is driven by either the knowledge possessed by firms; or at the same time, it can be conducted by leveraging relationships with foreign partners to access and/or acquire their knowledge. This is particularly relevant to small and medium enterprises (SMEs), mainly due to their resource constraints. This chapter assumes that, under certain circumstances, the internationalization of SMEs can give rise to, and benefit from enhancement of, their knowledge base. Starting from the main literature on internationalization, particularly from studies on Born-again Global firms, as well as knowledge acquisition and organizational learning, this chapter will analyze the internationalization path and to understand how it relates to the evolution of the firm’s knowledge through the study of Gruppo Germani S.r.l., an Italian family firm operating in the fashion industry. More specifically, this chapter’s empirical research attempts to explore the following questions: What sources of knowledge are particularly critical to the internationalization of SMEs; and how does knowledge acquisition enhance the firm’s knowledge base? To answer these questions, a longitudinal case study of Gruppo Germani was conducted. This methodology allows analyzing internationalization from the beginning for a comprehensive period of seven years. The results of this research highlight that knowledge base of the firm can constitute a stimulus to the firm’s international growth, if useful knowledge is continuously acquired and used by the company, where the main effect would be the improvement of the firm’s performance over time. Consequently, we suggest that the organization should not only leverage its knowledge base, but also identify and acquire useful external knowledge in order to progressively and successfully internationalize. Although the methodology does not allow generalization of results, this study presents some interesting findings at the end, and particularly, it intercepts some aspects that can be framed within the Born-again Global phenomenon, and extends the spectrum of “critical” events/episodes from which internationalization can begin. In our view, a firm can give rise to internationalization, starting from events that are “critical” for the enterprise because they allow the acquisition of external knowledge, especially tacit knowledge. The relative importance of external sources depends mainly on the characteristics of the knowledge base. This chapter also points out that, to make organizational learning possible, the firm should activate specific mechanisms of learning, especially articulation and codification.

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