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Risk-seeking behaviours in growth strategies of SMEs: targeting unstable environments

Author

Listed:
  • Noémie Dominguez

    (Laboratoire de Recherche Magellan - UJML - Université Jean Moulin - Lyon 3 - Université de Lyon - Institut d'Administration des Entreprises (IAE) - Lyon)

  • Maha Raïs

    (Laboratoire de Recherche Magellan - UJML - Université Jean Moulin - Lyon 3 - Université de Lyon - Institut d'Administration des Entreprises (IAE) - Lyon)

Abstract

In a business environment of greater growing uncertainty, SMEs are constraint have to find new markets to survive. Pushed to internationalise, they are traditionally seen as reactive entities engaging gradually on foreign markets to reduce risk and uncertainty. Analysing the role of risk in the internationalisation process, some authors found that firms were not completely risk averse, but ready rather willing to take risks until a certain level in order to maximise its their returns or to gain market power. Contrary to previous findings, it appears that conscious risk-taking strategies could be one of the key variable explaining that explains SMEs' success abroad. The aim of this paper is to analyse the importance of risk-seeking behaviours in SMEs' growth strategies and location choice. We found that some entrepreneurs are intentionally targeting high-risk markets to gain local legitimacy. If they may look like natural risk-takers to outsiders, our findings shown that entrepreneurs are not gamblers. Their privileged access to unique assets and assessment of information allows them to identify a wider range of alternatives and therefore to enter untapped or overlooked markets.

Suggested Citation

  • Noémie Dominguez & Maha Raïs, 2012. "Risk-seeking behaviours in growth strategies of SMEs: targeting unstable environments," Post-Print hal-00940448, HAL.
  • Handle: RePEc:hal:journl:hal-00940448
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    Cited by:

    1. Wang, Fan & Yang, Xiao & Zhuo, Xiaopo & Xiong, Minghua, 2019. "Joint logistics and financial services by a 3PL firm: Effects of risk preference and demand volatility," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 130(C), pages 312-328.

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