The Process of Internationalization in Emerging SMEs and Emerging Economies
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The Process of Internationalization in Emerging SMEs and Emerging Economies

Edited by Hamid Etemad

This book, the fourth volume in the McGill International Entrepreneurship Series, brings together 27 top scholars to explore the structural complexities, evolving relations and dynamic forces that are shaping a new system of multi-polar, multi-level international business relations. It examines entrepreneurial efforts and relations in different national and corporate cultures, each embedded in and also constrained by country-specific socio-economic structures and each vying for consumer attentions in competitive global markets.
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Chapter 9: Internationalization and post-IPO performance

Kin Kwok (Sam) Leung and Rod B. McNaughton


Extant literature suggests that firm performance benefits from internationalization. Traditional internationalization theories such as Hymer’s foreign direct investment (FDI) theory (Hymer 1976) and Dunning’s eclectic (OLI – ownership, location and internationalization advantages) theory (1980, 1995, 2000) explain that businesses internationalize to exploit monopolistic advantages such as labor and capital, as well as ownership-specific advantages and location-specific advantages in foreign markets. Research on born-global firms and international new ventures suggest that small and medium-sized enterprises (SMEs) can also benefit from internationalization (Rennie 1993; Knight and Cavusgil 1996, 2005; Oviatt and McDougall 1994, 1997; McDougall and Oviatt 1996; McDougall et al. 2003). A number of empirical tests of the relationship between firm financial performance and internationalization appear in the literature. However, few studies measure performance from the perspective of external investors. We report the results of a study of the relationship between intensity of internationalization and post-initial public offering (IPO) share price appreciation for a group of venture-backed companies headquartered in Australia.

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