INTERNATIONAL ENTREPRENEURSHIP

Barriers and Drivers of International Entrepreneurship among SME's

Table of Contents

Literature Review3

Entrepreneurship, Innovation And SME Internationalisation4

Conceptual framework9

Organisational innovation12

Firm size14

Internationalisation and exporting15

Internationalisation and market performance17

Organisational innovation intensity market performance19

Methodology21

Research design21

Key informants21

Measures22

Data Analysis25

References28

Literature Review

The international marketing literature over the last decade reflects a growing interest in small and medium-size enterprise (SME) internationalisation. This interest is driven by policy planners' desire to facilitate increased SME participation internationally which is hindered by the lack of a well-developed body of knowledge on SME internationalisation. The growth of interest can also be attributed to the pioneering interest in a number of interrelated disciplines such as strategic management, entrepreneurship and international business. The growing international marketing literature reflects a somewhat fragmented stream of research in that marketers have focused on market entry strategies (Tavakoli and McKiernan, 1999, pp45; Coviello and Martin, 1999, pp62; Crick and Jones, 2000, pp25), export information use (Williams, 2003), marketing strategies adopted by internationalising SMEs (Knight, 2000, pp30; Rundh, 2001, pp102) and international market performance (Lu and Beamish, 2001, pp102). In spite of the central role assigned to innovation in a firm's competitive strategy, the literature which examines the role of innovation in SME internationalisation has been limited. Similarly, the strategic marketing literature has assigned a prominent position to entrepreneurship citing it as a “parent of innovation” (Day and Wensley, 1988, pp124; Kerin, 1992, pp105). Accompanying this aspect of the marketing and innovation literature, there has been a strong interest in the concept of entrepreneurship within the broader SME internationalisation literature (and growing interest in the strategic marketing literature) (Day, 1992, pp154; Hill and LaForge, 1992, pp74; Carson, 1999, pp84). However, the role of international entrepreneurship and innovation in SME internationalisation has received limited attention in the international marketing literature.

Addressing the areas identified above where there has been limited attention, this paper examines the role of international entrepreneurship and innovation in SME internationalisation. The extant work by entrepreneurship researchers indicates that an entrepreneurship posture tends to be a “resource consuming posture” (Romanelli, 1987, pp58; Covin and Slevin, 1991). In this context, the role of “firm size” as a proxy of firm resources may be an important aspect to understand internationalisation and innovation. Addressing the demand for a broader conceptualisation of innovation, as has been espoused by Varadarajan and Jayachandran (1999) and others, we argue that both technological and non-technological innovations enable SMEs to achieve higher performance differential in international markets. The paper contributes to international marketing literature by examining the role of international entrepreneurship and organisational innovation in SME internationalisation.

Entrepreneurship, Innovation And SME Internationalisation

Reflecting the growing academic and practitioner interest on SMEs' contribution to national economies there has been a substantial interest in the international marketing literature on SME internationalisation (e.g. Knight, 2000, pp64; Coviello and Martin, 1999, Hutchinson et al., 2006, pp41). However, the internationalisation literature has traditionally emphasised the activities of large multinational firms and tends to rely on large firms as the traditional unit of analysis (Coviello and McAuley, 1999, pp20). This reflects a substantial inadequacy in the literature as there ...