Frontiers in European Entrepreneurship Research
Edited by David Smallbone, João Leitão, Mário Raposo and Friederike Welter
Chapter 7: The Nature of International Relationships and Performance: Policy Implications from the Case of Globally Integrated Small Firms
Christos Kalantaridis and Ivaylo Vassilev INTRODUCTION Changes in the scope for small firm engagement with world markets led to the growth in the number of studies exploring the internationalization of the small firm (Wright et al. 2007). This body of knowledge is underpinned by the conceptual premise that ‘size matters’. The impact of smallness is invariably conceptualized in terms of resource-related constraints (OECD 2002), as well as the overarching influence of the entrepreneurial personality (McDougal and Oviatt 2000). The argument goes that, as a result of size, the processes recorded in small businesses are significantly different from those concerning large – often multinational – enterprises (Dimitratos and Jones 2005). As a consequence of this, and supported by the assumption that internationalization influences positively performance, a host of policy initiatives to support the engagement of small firms with the world markets emerged. Within this context, a key policy challenge is to overcome the reluctance (behavioural) or inability (resource based) of small firms to internationalize. Thus, policy initiatives focus heavily on encouraging new small firms to trade internationally from inception, support established ‘export capable’ but inexperienced small firms to export, and promote additional exporting by those already involved in such activity (Wright et al. 2007). This chapter sets out to explore the nature of forward (with buyers) and backward (with suppliers/subcontractors) international relationships established by globally integrated small firms, and explore implications for performance and policy. In doing so, the chapter compares the experience of globally integrated small firms with their medium and large-scale...
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