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The impact of institutional impediments and information and knowledge exchange on SMEs' investments in international business relationships

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  • Jonsson, Sara
  • Lindbergh, Jessica
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    Abstract

    This paper investigates the impact of institutional impediments and of knowledge and information exchange in international business relationships on small and medium-sized enterprises (SMEs) specific investments in international business relationships and the outcome of such investments on the performance of SMEs. Using a sample of 255 internationalising SMEs, we develop and test three hypotheses with the linear structural relations (LISREL) model. The analysis shows that institutional impediments and the exchange of knowledge and information in business relationships lead to increased relationship specific investments (RSIs). Furthermore, such investment results in increased performance for the internationalising SME. Research commonly uses micro or macro properties of institutions to explain how institutional differences affect international business; however, limited research has been devoted to investigate how institutional differences, experienced through interaction in business relationships, affect the business relationship. This paper helps to close this gap by showing the effects of institutional differences on a relational level.

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    Bibliographic Info

    Article provided by Elsevier in its journal International Business Review.

    Volume (Year): 19 (2010)
    Issue (Month): 6 (December)
    Pages: 548-561

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    Handle: RePEc:eee:iburev:v:19:y:2010:i:6:p:548-561

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    Related research

    Keywords: Information and knowledge exchange Institutional impediments International business relationships Relationship specific investments (RSI) Small- and medium-sized enterprises (SMEs) Structural equation modeling (SEM);

    References

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    Cited by:
    1. Gunawan, Janti & Rose, Elizabeth L., 2014. "Absorptive capacity development in Indonesian exporting firms: How do institutions matter?," International Business Review, Elsevier, vol. 23(1), pages 45-54.
    2. Lindstrand, Angelika & Melén, Sara & Nordman, Emilia Rovira, 2011. "Turning social capital into business: A study of the internationalization of biotech SMEs," International Business Review, Elsevier, vol. 20(2), pages 194-212, April.
    3. Fan, Di & Zhu, Cherrie Jiuhua & Nyland, Chris, 2012. "Factors affecting global integration of Chinese multinationals in Australia: A qualitative analysis," International Business Review, Elsevier, vol. 21(1), pages 13-26.
    4. Svendsen, Mons Freng & Haugland, Sven A., 2011. "Host country institutional pressures and cross-border relationship governance," International Business Review, Elsevier, vol. 20(3), pages 324-337, June.
    5. Costa e Silva, Susana & Bradley, Frank & Sousa, Carlos M.P., 2012. "Empirical test of the trust–performance link in an international alliances context," International Business Review, Elsevier, vol. 21(2), pages 293-306.
    6. De Clercq, Dirk & Meuleman, Miguel & Wright, Mike, 2012. "A cross-country investigation of micro-angel investment activity: The roles of new business opportunities and institutions," International Business Review, Elsevier, vol. 21(2), pages 117-129.

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