Internationalization of Small and Medium-Sized Enterprises

The international activities of small firms are constrained by several barriers, including limited resources and capabilities to invest in exploiting growth opportunities abroad. This is particularly true of Small and Medium-sized Enterprises (SMEs) in developing countries, which are characterized by fewer managerial resources, experience and support services compared to their counterparts in developed countries. In this chapter we provide an overview of the different research streams that have addressed this issue in relation to SME internationalization. Building on a review of export literature and studies on SME internationalization, we discuss the factors affecting the international development of SMEs as well as the barriers which block or hinder them from initiating or increasing their export activities. We then focus on SMEs in developing countries. Empirical evidence from modern global manufacturing systems and increasing economic integration shows that the internationalization pathways of SMEs from developing countries may be more heterogeneous than those assumed by traditional models, which were identified in the context of mature developed economies.