Evidence from Around the World
Edited by Marian V. Jones, Pavlos Dimitratos, Margaret Fletcher and Stephen Young
Chapter 9: The Development of E-Commerce and the International Growth of Established SMEs: A Capability Perspective
Anna Morgan-Thomas SUMMARY Developments in Internet-based e-commerce offer smaller firms an unprecedented opportunity to expand their business by harnessing opportunities outside the home market. A question of whether to get involved and how to best shape their involvement in online business represents a key strategic decision for many internationalizing small and medium-sized enterprises (SMEs). Focusing on the dynamics of online growth, the study is concerned with the question of how firm capabilities affect international performance. In contrast to existing studies on e-commerce and internationalization, the focus is not on Internet new ventures but on established firms which have developed e-capabilities in the context of their conventional business operations. Considering firms’ international capabilities and e-capabilities and using a sample of 603 UK SMEs, the chapter analyses conditions that accompany dynamic online growth. Building on the capabilities perspective, the study examines how complementary capabilities in internationalization and e-commerce, together with external knowledge sources and intentional efforts on the part of the firm, affect online growth. The results show that whilst some capabilities stimulate online growth, others have detrimental effects. E-capabilities directed at building relations are most strongly associated with growth. The findings have important implications for policy and practice. INTRODUCTION Studies on international entrepreneurship have drawn attention to factors which facilitate rapid international growth of small firms (Oviatt 123 124 Internationalization, entrepreneurship and the smaller firm and McDougall, 1994; Knight and Cavusgil, 1996; Madsen and Servais, 1997; Jones, 1999; Autio et al., 2000). Focusing on the speed with which internationalization commences in...