IDEAS home Printed from https://ideas.repec.org/a/spr/manint/v60y2020i4d10.1007_s11575-020-00423-w.html
   My bibliography  Save this article

SME Internationalisation: The Relationship Between Social Capital and Entry Mode

Author

Listed:
  • Jane Menzies

    (Deakin University)

  • Stuart Orr

    (Deakin University)

  • Justin Paul

    (University of Puerto Rico)

Abstract

The literature has assessed the social capital of internationalised SMEs, but not how SME social capital affects entry mode and the mechanisms involved in the effect. Case data from 35 SMEs which have internationalised to China were analysed to identify how SME social capital affected entry mode. Weak relational and structural social capital were found to provide network resources, information and entry mode opportunity identification which affected entry mode, but later became path dependent on the entry mode due to its effect on the context for the social capital. This internal and external context resulted from specialised organisational resources, institutional forces and market conditions and influenced the types of social capital. Political social capital was found to be weaker in its effect on entry mode than business social capital. Expectations of future social capital were influenced by initial social capital and some SMEs selected their entry mode to create a context that supported social capital. Several mechanisms of affect were identified, including using trust to support social capital development, a reduction in the resources required to maintain social capital over time due to intentional manipulation of context and a reduction in the focus on developing weak ties as part of social capital over time.

Suggested Citation

  • Jane Menzies & Stuart Orr & Justin Paul, 2020. "SME Internationalisation: The Relationship Between Social Capital and Entry Mode," Management International Review, Springer, vol. 60(4), pages 623-650, August.
    • Handle: RePEc:spr:manint:v:60:y:2020:i:4:d:10.1007_s11575-020-00423-w
    DOI: 10.1007/s11575-020-00423-w
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s11575-020-00423-w
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s11575-020-00423-w?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Paul Gooderham & Dana B. Minbaeva & Torben Pedersen, 2011. "Governance Mechanisms for the Promotion of Social Capital for Knowledge Transfer in Multinational Corporations," Journal of Management Studies, Wiley Blackwell, vol. 48(1), pages 123-150, January.
    2. Ojala, Arto, 2009. "Internationalization of knowledge-intensive SMEs: The role of network relationships in the entry to a psychically distant market," International Business Review, Elsevier, vol. 18(1), pages 50-59, February.
    3. Yli-Renko, H. & Autio, E. & Tontti, V., 2002. "Social capital, knowledge, and the international growth of technology-based new firms," International Business Review, Elsevier, vol. 11(3), pages 279-304, June.
    4. Liu, Leigh Anne & Friedman, Raymond A. & Chi, Shu-cheng, 2005. "‘Ren Qing†versus the ‘Big Five’ The Role of Culturally Sensitive Measures of Individual Difference in Distributive Negotiations," Management and Organization Review, Cambridge University Press, vol. 1(2), pages 225-247, July.
    5. Maurice Gesthuizen & Peer Scheepers & William Veld & Beate Völker, 2013. "Structural aspects of social capital: tests for cross-national equivalence in Europe," Quality & Quantity: International Journal of Methodology, Springer, vol. 47(2), pages 909-922, February.
    6. Ciravegna, Luciano & Lopez, Luis & Kundu, Sumit, 2014. "Country of origin and network effects on internationalization: A comparative study of SMEs from an emerging and developed economy," Journal of Business Research, Elsevier, vol. 67(5), pages 916-923.
    7. Peter Moran, 2005. "Structural vs. relational embeddedness: social capital and managerial performance," Strategic Management Journal, Wiley Blackwell, vol. 26(12), pages 1129-1151, December.
    8. Agndal, Henrik & Chetty, Sylvie & Wilson, Heather, 2008. "Social capital dynamics and foreign market entry," International Business Review, Elsevier, vol. 17(6), pages 663-675, December.
    9. Chao C. Chen & Xiao-Ping Chen & Shengsheng Huang, 2013. "Chinese Guanxi: An Integrative Review and New Directions for Future Research. 中国人的关系: 综合文献回顾及未来研究方向," Management and Organization Review, The International Association for Chinese Management Research, vol. 9(1), pages 167-207, March.
    10. Lindstrand, Angelika & Hånell, Sara Melén, 2017. "International and market-specific social capital effects on international opportunity exploitation in the internationalization process," Journal of World Business, Elsevier, vol. 52(5), pages 653-663.
    11. Bill McEvily & Akbar Zaheer, 1999. "Bridging ties: a source of firm heterogeneity in competitive capabilities," Strategic Management Journal, Wiley Blackwell, vol. 20(12), pages 1133-1156, December.
    12. Hadjikhani, Amjad & Hadjikhani, Annoch Isa & Thilenius, Peter, 2014. "The internationalization process model: A proposed view of firms’ regular incremental and irregular non-incremental behaviour," International Business Review, Elsevier, vol. 23(1), pages 155-168.
    13. Chen, Chao C. & Chen, Xiao-Ping & Huang, Shengsheng, 2013. "Chinese Guanxi: An Integrative Review and New Directions for Future Research," Management and Organization Review, Cambridge University Press, vol. 9(1), pages 167-207, March.
    14. Lai, Jung-Ho & Chen, Li-Yu & Song, Sangcheol, 2019. "How outside directors’ human and social capital create value for corporate international investments," Journal of World Business, Elsevier, vol. 54(2), pages 93-106.
    15. Catherine Welch & Niina Nummela & Peter Liesch, 2016. "The Internationalization Process Model Revisited: An Agenda for Future Research," Management International Review, Springer, vol. 56(6), pages 783-804, December.
    16. Shameen Prashantham & Charles Dhanaraj, 2010. "The Dynamic Influence of Social Capital on the International Growth of New Ventures," Journal of Management Studies, Wiley Blackwell, vol. 47(6), pages 967-994, September.
    17. James E Clarke & Peter W Liesch, 2017. "Wait-and-see strategy: Risk management in the internationalization process model," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 48(8), pages 923-940, October.
    18. Richard Tacon, 2016. "The Organizational Embeddedness of Social Capital: A Comparative Case Study of Two Voluntary Organizations," Journal of Economic Issues, Taylor & Francis Journals, vol. 50(1), pages 23-42, January.
    19. Suzana Braga Rodrigues & John Child, 2012. "Building social capital for internationalization," RAC - Revista de Administração Contemporânea (Journal of Contemporary Administration), ANPAD - Associação Nacional de Pós-Graduação e Pesquisa em Administração, vol. 16(1), pages 23-38.
    20. Julie Juan Li & Laura Poppo & Kevin Zheng Zhou, 2008. "Do managerial ties in China always produce value? Competition, uncertainty, and domestic vs. foreign firms," Strategic Management Journal, Wiley Blackwell, vol. 29(4), pages 383-400, April.
    21. Leila Hurmerinta & Eriikka Paavilainen-Mäntymäki & Mélanie E. Hassett, 2016. "TEMPUS FUGIT: A Hermeneutic Approach to the Internationalisation Process," Management International Review, Springer, vol. 56(6), pages 805-825, December.
    22. Doornich, June Borge, 2018. "Managerial learning from social capital during internationalization," International Business Review, Elsevier, vol. 27(4), pages 877-892.
    23. 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.
    24. Presutti, Manuela & Boari, Cristina & Fratocchi, Luciano, 2016. "The evolution of inter-organisational social capital with foreign customers: Its direct and interactive effects on SMEs’ foreign performance," Journal of World Business, Elsevier, vol. 51(5), pages 760-773.
    25. repec:dau:papers:123456789/4690 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Zahoor, Nadia & Al-Tabbaa, Omar, 2021. "Post-entry internationalization speed of SMEs: The role of relational mechanisms and foreign market knowledge," International Business Review, Elsevier, vol. 30(1).
    2. Mikael Hilmersson & Roger Schweizer & Sylvie Chetty, 2022. "The Relationship Between Timing, Speed, and Performance in Foreign Market Network Entry," Management International Review, Springer, vol. 62(3), pages 325-349, June.
    3. Jafari-Sadeghi, Vahid & Amoozad Mahdiraji, Hannan & Bresciani, Stefano & Pellicelli, Anna Claudia, 2021. "Context-specific micro-foundations and successful SME internationalisation in emerging markets: A mixed-method analysis of managerial resources and dynamic capabilities," Journal of Business Research, Elsevier, vol. 134(C), pages 352-364.
    4. Jeoung Yul Lee & Alfredo Jiménez & Timothy M. Devinney, 2020. "Learning in SME Internationalization: A New Perspective on Learning From Success versus Failure," Management International Review, Springer, vol. 60(4), pages 485-513, August.
    5. Kraus, Patrick & Stokes, Peter & Tarba, Shlomo Y. & Rodgers, Peter & Dekel-Dachs, Ofer & Britzelmaier, Bernd & Moore, Neil, 2022. "The ambidextrous interaction of RBV-KBV and regional social capital and their impact on SME management," Journal of Business Research, Elsevier, vol. 142(C), pages 762-774.
    6. Kim, Sahrok & Praveen Parboteeah, K. & Cullen, John B. & Jeong, Nara, 2022. "Social institutions approach to women’s firm ownership and firm bribery activity: A study of small-sized firms in emerging markets," Journal of Business Research, Elsevier, vol. 144(C), pages 1333-1349.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lindstrand, Angelika & Hånell, Sara Melén, 2017. "International and market-specific social capital effects on international opportunity exploitation in the internationalization process," Journal of World Business, Elsevier, vol. 52(5), pages 653-663.
    2. Presutti, Manuela & Boari, Cristina & Fratocchi, Luciano, 2016. "The evolution of inter-organisational social capital with foreign customers: Its direct and interactive effects on SMEs’ foreign performance," Journal of World Business, Elsevier, vol. 51(5), pages 760-773.
    3. Doornich, June Borge, 2018. "Managerial learning from social capital during internationalization," International Business Review, Elsevier, vol. 27(4), pages 877-892.
    4. Jian Du & Chao Zhou, 2019. "Does guanxi matter in the foreign expansion of Chinese manufacturing firms? The mediator role of linking and leveraging," Asia Pacific Journal of Management, Springer, vol. 36(2), pages 473-497, June.
    5. Mai, Nhat Chi, 2018. "Valuing Social Capital: Shifting Strategies for Export Success of Vietnamese Small- and Medium-Sized Enterprises," OSF Preprints rxjav, Center for Open Science.
    6. Rimante Sedziniauskiene & Jurgita Sekliuckiene & Antonella Zucchella, 2019. "Networks’ Impact on the Entrepreneurial Internationalization: A Literature Review and Research Agenda," Management International Review, Springer, vol. 59(5), pages 779-823, October.
    7. Paul, Justin & Parthasarathy, Sundar & Gupta, Parul, 2017. "Exporting challenges of SMEs: A review and future research agenda," Journal of World Business, Elsevier, vol. 52(3), pages 327-342.
    8. Maria Rumyantseva & Catherine Welch, 2023. "The born global and international new venture revisited: An alternative explanation for early and rapid internationalization," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 54(7), pages 1193-1221, September.
    9. Maria Ripollés & Andreu Blesa, 2020. "And yet, non-equity cooperative entries do improve international performance: uncovering the role of networks’ social capital," Small Business Economics, Springer, vol. 55(3), pages 761-776, October.
    10. Hongjuan Zhang & Rong Han & Liang Wang & Runhui Lin, 2021. "Social capital in China: a systematic literature review," Asian Business & Management, Palgrave Macmillan, vol. 20(1), pages 32-77, February.
    11. Hongjuan Zhang & Rong Han & Liang Wang & Runhui Lin, 0. "Social capital in China: a systematic literature review," Asian Business & Management, Palgrave Macmillan, vol. 0, pages 1-46.
    12. Ciravegna, Luciano & Majano, Sara B. & Zhan, Ge, 2014. "The inception of internationalization of small and medium enterprises: The role of activeness and networks," Journal of Business Research, Elsevier, vol. 67(6), pages 1081-1089.
    13. Hongjuan Zhang & Liang Wang & Rong Han, 2019. "The China-West divide on social capital: A meta-analysis," Asia Pacific Journal of Management, Springer, vol. 36(3), pages 745-772, September.
    14. Yulia Muratova & Jakob Arnoldi & Xin Chen & Joachim Scholderer, 2018. "Political rotations and cross-province firm acquisitions in China," Asian Business & Management, Palgrave Macmillan, vol. 17(1), pages 37-58, February.
    15. Martina Musteen & Mujtaba Ahsan & Taekyung Park, 2017. "SMEs, Intellectual Capital, and Offshoring of Service Activities: An Empirical Investigation," Management International Review, Springer, vol. 57(4), pages 603-630, August.
    16. Lu Shen & Kevin Zheng Zhou & Chuang Zhang, 2022. "Is Interpersonal Guanxi Beneficial in Fostering Interfirm Trust? The Contingent Effect of Institutional- and Individual-Level Characteristics," Journal of Business Ethics, Springer, vol. 176(3), pages 575-592, March.
    17. Elena-Mădălina Vătămănescu & Elena-Alexandra Gorgos & Alexandru Mihai Ghigiu & Monica Pătruț, 2019. "Bridging Intellectual Capital and SMEs Internationalization through the Lens of Sustainable Competitive Advantage: A Systematic Literature Review," Sustainability, MDPI, vol. 11(9), pages 1-22, April.
    18. Martina Musteen & Deepak K. Datta & Marcus M. Butts, 2014. "Do International Networks and Foreign Market Knowledge Facilitate SME Internationalization? Evidence from the Czech Republic," Entrepreneurship Theory and Practice, , vol. 38(4), pages 749-774, July.
    19. Shameen Prashantham & Julian Birkinshaw, 2015. "Choose Your Friends Carefully: Home-Country Ties and New Venture Internationalization," Management International Review, Springer, vol. 55(2), pages 207-234, April.
    20. Do, Hoa & Nguyen, Bach & Shipton, Helen, 2023. "Innovation and internationalization in an emerging market context: Moderating effects of interpersonal and organizational social networks," Journal of International Management, Elsevier, vol. 29(2).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:manint:v:60:y:2020:i:4:d:10.1007_s11575-020-00423-w. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.