Handbook of Research on European Business and Entrepreneurship
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Handbook of Research on European Business and Entrepreneurship

Towards a Theory of Internationalization

Edited by Léo-Paul Dana, Isabell M. Welpe, Mary Han and Vanessa Ratten

This unique Handbook illustrates how entrepreneurs across Europe tackle internationalization. This timely and important book identifies patterns and builds a theory of international entrepreneurship in Europe.
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Chapter 16: Patterns of Internationalization of German SMEs: Surveying Manufacturing Offshoring

Steffen Kinkel, Gunter Lay and Spomenka Maloca


16 Patterns of internationalization of German SMEs: surveying manufacturing offshoring Steffen Kinkel, Gunter Lay and Spomenka Maloca Today, acting globally is no longer a strategic option exclusively for giant multinational enterprises (Vernon, 1974; Caves, 1982). More and more small and medium-sized enterprises (SMEs) are getting involved in this arena (Anderson et al., 1998; Fillis, 2001; Bell et al., 2003; Kohn, 1997; Reynolds, 1997; Rugman and Hodgetts, 2000; Urata and Kawai, 2000). They frequently operate within a narrowly defined market niche and cannot afford only to target a home market. International business literature recognizes the growing relevance of SMEs’ internationalization, yet it remains largely focused on the export transaction as the predominant entry mode (Chetty, 1999; Gankema et al., 2000). The ‘traditional SME path’ can be described as an incremental approach to internationalization, establishing themselves in their domestic markets before initiating export activities (Johanson and Wiedersheim-Paul, 1975; Johanson and Vahlne, 1977; Bell et al., 2003). Because of a lack of knowledge about foreign countries and a propensity to avoid uncertainty, these firms start exporting to neighbouring countries or countries that are comparatively similar as regards business practices. According to the Uppsala model, the establishing of a manufacturing facility abroad is the fourth and last stage of a firm’s internationalization process (Johanson and Wiedersheim-Paul, 1975; Johanson and Vahlne, 1977). On the other hand, there is also increasing evidence that not only large multinational enterprises, but also SMEs pursue other modes of entry such as direct foreign investments or...

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