Determinants of internationalization
3.3 Theoretical background In several theories an attempt is made to predict which factors are determining the internationalization of SMEs. With the knowledge from the in-depth literature review that was presented earlier the choice is made to divide these factors into internal and external 2 factors, which is theoretically justified for example according to Zou and Stan (1998). In most analyses the internal factors refer to organizational factors (see for example Leonidou et al., 1998; Suares-Ortega and AlamoVera, 2005; Antoncic and Hisrich, 2000). Yet we have chosen to split up the internal factors into entrepreneur (founder/manager) characteristics and organizational characteristics. Thereby reflecting the importance and the role we believe founder/manager and their characteristics have in the internationalization process. By external factors we mean those factors that the firm can not control or to a very limited extent such as macro-economic, social, physical, cultural, and political aspects, as well as industry characteristics that influence international behavior and performance. In other words, they represent the opportunities of, and threats to the firm (Wattanasupachoke, 2002). The clustering of the determinants into internal and external, as given above, is theoretically justified because the two clusters correspond to different theoretical bases. Both categories are closely related to the OLI Framework. The internal factors are closely related to O-advantages in the OLI framework, while external factors are more related to the L- and I-advantages. The internal and external factors fit, directly or indirectly, within the Resource-Based-View (RBV) of the firm. The RVB assumes that the internal resources are the main determinants of firm behavior, for example the entrepreneur is seen by most researchers as an important and unique resource of the firm (Miesenbock, 1988). And it recognizes the importance of external influences since the firm’s resources should be adapted to the changing environment. In addition it is in line with previous studies that used the RVB as a background (Stoian 2006; Leonidou et al., 1998; Fernandez & Castresana, 2005). Although these studies all have developed their own preference for groups of factors, in general they give different names to the same thing. External factors are also included for the reason that adapting to the environment is becoming more important for firms nowadays. Due to the pace of technological change, declining governmentimposed barriers and the rapid globalization of markets many SMEs face different opportunities
2
Remark; as mentioned before there will be no analyses (except literature review) on external factors, due to the
limitations of the dataset.
Chapter 3
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