Internationalization, Entrepreneurship and the Smaller Firm

Internationalization, Entrepreneurship and the Smaller Firm

Evidence from Around the World

Edited by Marian V. Jones, Pavlos Dimitratos, Margaret Fletcher and Stephen Young

This forward-looking volume contains state-of-the-art analysis of the current research themes and challenges influencing the internationalization of SMEs.

Chapter 7: Clients as a ‘Hidden’ Resource in Rapid Internationalization

Sharon Loane and Jim Bell

Subjects: business and management, entrepreneurship, international business


Sharon Loane and Jim Bell SUMMARY Existing approaches explaining the accelerated or rapid internationalization of small firms are incomplete as they do not capture the key role of the firm’s client base in this endeavour. While the extant networking literature implicitly recognizes clients as influential in rapid internationalization, their specific contributions to the process have not undergone detailed scrutiny to date. Consequently, the chapter explores the various ways in which clients can act as a knowledge conduit and a valuable resource in the internationalization effort. Important dimensions of the relationships between clients and rapidly internationalizing firms include their role in: international small firm formation; internationalization through client followership; reputation-building; innovation and new product development; lessening entry barriers; and social capital and human resource acquisition. The authors posit that the network approach and both the resource-based view (RBV) and the knowledge-based views (KBV) of internationalization may be extended by further exploration of these issues. Propositions are developed and concluding remarks presented, including implications for public policy-makers. INTRODUCTION The rapid internationalization of small and medium-sized enterprises (SMEs) has emerged as an area of research interest, as increasingly such firms are actively and aggressively engaged in international activity, often from inception. Pioneering global start-ups now account for a substantial proportion of exports in many countries (Verity and Hof, 1994; Luostarinen et al., 1994; Jones, 1999; Coviello and McAuley, 1999). Various trends in recent years have led to the involvement of SMEs in global activity; for example, the emergence and diffusion of information 91...

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