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Overcoming Resource-Constraints through Internationalization? An Empirical Analysis of European SMEs

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  • Jolanda Hessels

Abstract

Previous research has indicated that firms can use internationalization as a strategy to access or build up resources. Such a strategy may be of particular interest or even necessary (for example to survive or grow) for firms that lack specific resources. Based on resource dependency theory and the model for entrepreneurial internationalization this paper investigates whether resource scarcities in terms of labor, finance and technology increase the likelihood for small and medium-sized enterprises (SMEs) to aim to access or accumulate these specific resources through internationalization. A number of hypotheses are tested using firm-level data from the ENSR Enterprise Survey 2003 for 7,673 SMEs located in 18 European countries. The results indicate that perceived resource constraints in terms of labor and finance spur SMEs to undertake international activities with the aim to access or accumulate labor, respectively finance. It is also found that among internationally active SMEs perceived constraints in terms of labor, finance and new technology increase the probability of SMEs using their international activities as a means for accessing or acquiring these scarce resources.

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Bibliographic Info

Paper provided by EIM Business and Policy Research in its series Scales Research Reports with number H200806.

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Length: 21 pages
Date of creation: 18 Jun 2008
Date of revision:
Handle: RePEc:eim:papers:h200806

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  1. Heinz Hollenstein, 2005. "Determinants of International Activities: Are SMEs Different?," Small Business Economics, Springer, vol. 24(5), pages 431-450, 06.
  2. David Audretsch & Roy Thurik, 2004. "A Model of the Entrepreneurial Economy," Papers on Entrepreneurship, Growth and Public Policy 2004-12, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
  3. Erkko Autio, 2005. "Creative tension: the significance of Ben Oviatt's and Patricia McDougall's article ‘toward a theory of international new ventures’," Journal of International Business Studies, Palgrave Macmillan, vol. 36(1), pages 9-19, January.
  4. Westhead, Paul & Wright, Mike & Ucbasaran, Deniz, 2002. "International market selection strategies selected by 'micro' and 'small' firms," Omega, Elsevier, vol. 30(1), pages 51-68, February.
  5. Caves, Richard E, 1971. "International Corporations: The Industrial Economics of Foreign Investment," Economica, London School of Economics and Political Science, vol. 38(149), pages 1-27, February.
  6. Westhead, Paul & Wright, Mike & Ucbasaran, Deniz, 2001. "The internationalization of new and small firms: A resource-based view," Journal of Business Venturing, Elsevier, vol. 16(4), pages 333-358, July.
  7. Zahra, Shaker A. & Korri, Juha Santeri & Yu, JiFeng, 2005. "Cognition and international entrepreneurship: implications for research on international opportunity recognition and exploitation," International Business Review, Elsevier, vol. 14(2), pages 129-146, April.
  8. Erwin Dichtl & Hans-Georg Koeglmayr & Stefan Mueller, 1990. "International Orientation as a Precondition for Export Success," Journal of International Business Studies, Palgrave Macmillan, vol. 21(1), pages 23-40, March.
  9. Alvarez, Roberto, 2004. "Sources of export success in small- and medium-sized enterprises: the impact of public programs," International Business Review, Elsevier, vol. 13(3), pages 383-400, June.
  10. David B. Audretsch & A. Roy Thurik, 2000. "Capitalism and democracy in the 21st Century: from the managed to the entrepreneurial economy," Journal of Evolutionary Economics, Springer, vol. 10(1), pages 17-34.
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Cited by:
  1. Jolanda Hessels, 2008. "International Entrepreneurship: An Introduction, Framework and Research Agenda," Scales Research Reports H200823, EIM Business and Policy Research.

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