Edited by Léo-Paul Dana
Paul W. Beamish and Jane W. Lu Japanese small and medium sized ﬁrms (SMEs) are internationalizing at an accelerating rate.* Using a longitudinal dataset, this research provides a comprehensive analysis of this phenomenon in terms of Japanese SMEs’ foreign direct investments (FDIs), a most entrepreneurial form of internationalization. The analysis in this research answers questions concerning how Japanese SMEs have made foreign direct investment in terms of the timing of entry, and of the sectors and locations of these investments. The analysis also explores the diﬀerences in subsidiary characteristics across sectors and regions, and it links these diﬀerences in characteristics to the performance of Japanese SMEs’ international subsidiaries. Japanese SMEs’ joint ventures outperformed their wholly-owned subsidiaries, while subsidiary performance is positively correlated with subsidiary age and investment size but negatively correlated with the level of Japanese control. With the decline in trade barriers and the advance in technology, SMEs are playing an increasingly important role in international markets (Oviatt and McDougall, 1994, 1999). As a consequence of this surge, the internationalization of SMEs began to attract greater levels of attention in both the entrepreneurship literature and the international business literature. This increased attention led to the birth of a new academic ﬁeld: international entrepreneurship, which is at the intersection of the two literatures (McDougall and Oviatt, 2000). Within this new yet fast-growing ﬁeld, studies have looked at the internationalization of SMEs from a variety of countries. However, to the best of our knowledge, there is little systematic investigation...
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