The Case of Canada

Received wisdom (and theories) associate foreign operations with large enterprises. Only large firms have the resources — technological, human, financial or other — to undertake the risky and costly endeavours of international technology transfer and foreign investment. This conventional belief is based on several major facts. In the first place, large enterprises, based in industrialised countries, were the first to launch international activities, from the late nineteenth century. Small and medium-sized enterprises (SMEs) followed only later, often well after the second World War. Secondly, large enterprises are much more visible than SMEs; most often they are publicly owned; their huge size makes their international moves evident and they often become the object of wide debate and public policy. This is not the case with SMEs; smaller firms are often privately owned and controlled, they carry reduced amounts of resources across borders and hire few worker in the host country; often associated with local partners and devoid of well-known trademarks, they are much less visible than large firms. Finally, large enterprises can undertake international operations in many different developed and developing countries, while SMEs often spill over the frontiers into neighbouring (mostly developed) countries and seldom undertake more than three or four international operations at the same time.