Towards a Theory of Internationalization
Edited by Léo-Paul Dana, Isabell M. Welpe, Mary Han and Vanessa Ratten
Chapter 16: Patterns of Internationalization of German SMEs: Surveying Manufacturing Offshoring
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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