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Internationalization of small and medium sized enterprises in the Baltic Sea Region

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  • Jansson, Hans
  • Sandberg, Susanne

Abstract

We integrate internationalization process theory with industrial network theory to explain SME entry in emerging markets. We show that entry modes are complemented by entry nodes and entry processes. We develop a Five/Five Stages Model to consider the dynamic interaction between these factors. We undertook a survey of 116 SMEs in Southern Sweden trading with the Baltic States, Poland and Russia, as complemented by a case study of ten SMEs trading with Poland and an analysis of trade statistics of SMEs in Southern Sweden. We find that relationships are critical for entry as most firms rely on direct relationships with customers or dyads. The involvement of subsidiaries is uncommon, suggesting a low degree of FDI. Meanwhile, triads or indirect relationships through distributors or agents are more important. This low cost entry node creates a paradox in that the insufficient learning it provides about local markets obstructs further internationalization. By relating entries to the global internationalization process, we find that most SMEs trade with few countries in the region, indicating a low degree of regional internationalization.

Suggested Citation

  • Jansson, Hans & Sandberg, Susanne, 2008. "Internationalization of small and medium sized enterprises in the Baltic Sea Region," Journal of International Management, Elsevier, vol. 14(1), pages 65-77, March.
  • Handle: RePEc:eee:intman:v:14:y:2008:i:1:p:65-77
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Vithessonthi, Chaiporn, 2016. "Capital investment, internationalization, and firm performance: Evidence from Southeast Asian countries," Research in International Business and Finance, Elsevier, vol. 38(C), pages 393-403.
    2. Francesca Checchinato & Lala Hu & Tiziano Vescovi, 2014. "Do distributors really know the product? Approaching emerging markets through exports," Working Papers 19, Department of Management, Università Ca' Foscari Venezia.
    3. Klaus Meyer & Ornjira Thaijongrak, 2013. "The dynamics of emerging economy MNEs: How the internationalization process model can guide future research," Asia Pacific Journal of Management, Springer, vol. 30(4), pages 1125-1153, December.
    4. Vladimirov, Zhelyu & Simeonova-Ganeva, Ralitsa & Ganev, Kaloyan, 2012. "Interaction of leading and supporting factors for the SME competitiveness," MPRA Paper 37251, University Library of Munich, Germany.
    5. Maria Ripollés & Andreu Blesa, 0. "Entry mode choices in the international new ventures context. A study from different theoretical perspectives," International Entrepreneurship and Management Journal, Springer, vol. 0, pages 1-21.
    6. Daria Volchek & Ari Jantunen & Sami Saarenketo, 2013. "The institutional environment for international entrepreneurship in Russia: Reflections on growth decisions and performance in SMEs," Journal of International Entrepreneurship, Springer, vol. 11(4), pages 320-350, December.
    7. Silvia Rita Sedita & Ivan De Noni & Luciano Pilotti, 2014. "How do related variety and differentiated knowledge bases influence the resilience of local production systems?," "Marco Fanno" Working Papers 0180, Dipartimento di Scienze Economiche "Marco Fanno".
    8. repec:mgt:youmgt:v:15:y:2017:i:3:p:291-314 is not listed on IDEAS
    9. Nader Ale Ebrahim & Shamsuddin Ahmed & Zahari Taha, 2010. "SMEs; Virtual Research and Development (R&D) Teams and New Product Development: A Literature Review," Post-Print hal-00593362, HAL.
    10. Barbara Francioni, 2011. "Changes in Entry Mode Strategy for Italian SMEs," Annals - Economic and Administrative Series -, Faculty of Business and Administration, University of Bucharest, vol. 5(1), pages 99-116, December.
    11. Gelbuda, Modestas & Meyer, Klaus E. & Delios, Andrew, 2008. "International business and institutional development in Central and Eastern Europe," Journal of International Management, Elsevier, vol. 14(1), pages 1-11, March.
    12. Alshahry Abdullah saeed A & Wang Aimin, 2015. "Market Orientation Impact on Radical and Incremental Marketing Innovation: A Study of Saudi Arabia Hospital Marketing Efforts," International Journal of Management Science and Business Administration, Inovatus Services Ltd., vol. 1(6), pages 101-117, May.
    13. Nader Ale Ebrahim & Shamsuddin Ahmed & Zahari Taha, 2009. "Virtual R & D teams in small and medium enterprises: A literature review," Post-Print hal-00593358, HAL.
    14. Nader Ale Ebrahim & Shamsuddin Ahmed & Zahari Taha, 2010. "Virtual R&D Teams and SMEs Growth: A Comparative Study Between Iranian and Malaysian SMEs," Post-Print hal-00593364, HAL.
    15. repec:spr:epolin:v:44:y:2017:i:3:d:10.1007_s40812-016-0061-6 is not listed on IDEAS
    16. Richardson, Christopher, 2014. "Firm internationalisation within the Muslim world," Journal of World Business, Elsevier, vol. 49(3), pages 386-395.
    17. Yuksel Ayden, 2015. "A Critical Review of Theoretical Perspectives on Emerging Economy Multinationals," European Journal of Economic and Political Studies, Fatih University, vol. 8(1), pages 19-42.
    18. José G. Vargas-Hernández & L.M.V. Villegas Martinez, 2017. "Expansion and Internationalization of Manufacturing MSMEs Mexicanas," Journal of Applied Management and Investments, Department of Business Administration and Corporate Security, International Humanitarian University, vol. 6(2), pages 138-146, May.
    19. Marginean, Mihai, 2018. "Cuantificarea competitivitatii IMM-urilor UE-28 vs. SUA
      [The quantification of competitiveness of EU-28 SMEs vs. USA SMEs]
      ," MPRA Paper 83774, University Library of Munich, Germany.
    20. Ivan De Noni & Roberta Apa, 2015. "The moderating effect of exploitative and exploratory learning on internationalisation–performance relationship in SMEs," Journal of International Entrepreneurship, Springer, vol. 13(2), pages 96-117, June.
    21. Vladimirov, Zhelyu & Simeonova-Ganeva, Ralitsa & Ganev, Kaloyan, 2013. "Significance of globalization-specific factors for SME competitiveness: a conceptual model and an empirical test," MPRA Paper 63518, University Library of Munich, Germany.
    22. repec:spr:intemj:v:13:y:2017:i:2:d:10.1007_s11365-016-0410-y is not listed on IDEAS
    23. Hurmerinta, Leila & Nummela, Niina & Paavilainen-Mäntymäki, Eriikka, 2015. "Opening and closing doors: The role of language in international opportunity recognition and exploitation," International Business Review, Elsevier, vol. 24(6), pages 1082-1094.
    24. Niklas Åkerman, 2015. "International opportunity realization in firm internationalization: Non-linear effects of market-specific knowledge and internationalization knowledge," Journal of International Entrepreneurship, Springer, vol. 13(3), pages 242-259, September.
    25. Sandberg, Susanne, 2014. "Experiential knowledge antecedents of the SME network node configuration in emerging market business networks," International Business Review, Elsevier, vol. 23(1), pages 20-29.

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