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2022 | OriginalPaper | Chapter

A Note on the Internationalization Strategies of SMEs

Authors : Thanh Tam Nguyen-Huu, Med Kechidi

Published in: International Trade, Economic Development, and the Vietnamese Economy

Publisher: Springer Nature Singapore

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Abstract

In this chapter, we provide an analysis of the internationalization strategies of SMEs. We investigate how the third market size can prevent their internationalization process. Interestingly, when the third market size reaches some thresholds, SMEs do a tariff-jumping as a second best. In particular, when the third market size is large enough, internationalization becomes impossible.

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Footnotes
1
See, for example, Motta and Norman (1996), Karolina et al. (2007), Minda and Nguyen-Huu (2012) for theoretical frameworks, or Barry (2004), Ito (2013) for empirical evidence.
 
2
Litterature on SMEs’ international activities almost considers either export or horizontal/verical FDI as the main internationationalization strategies (Lu and Beamish (2001), Kuo and Li (2003), Justin et al. (2017); among others). Other studies only use the term “SME internationalization strategies” without specifying explicitly the associated form (Chelliah et al., 2010; Soulaimane, 2011; Sui, 2014; among others) . Few research examines EPFDI as a possible strategy of SME to adopt the rise of RIA.
 
3
To simplify the model’s representation, let us assume that there is no firm from country T (firm t). In other words, we can consider that firms t, if there are any, have some stable market shares. Firms from foreign countries (either from A or O) can only compete in the remaining market shares.
 
Literature
Barry, F. (2004). “Export-platform foreign direct investment: the Irish experience,” EIB Papers 6/2004, European Investment Bank, Economics Department.
Chelliah, S., Soulaiman, M., & Yusliza, M.-Y. (2010). Internationalization and performance: Small and medium enterprises (SMEs) in Malaysia. International Journal of Business and Management, 5(6), 27–37.CrossRef
Ito, T. (2013). Export platform foreign direct investment: theory and evidence. The World Economy, 36(5), 563–581.CrossRef
Justin, P., Sundar, P., & Parul, G. (2017). Exporting challenges of SMEs. Small Business Economics, 20, 219–231.
Karolina, E., Forslid, R., & Markusen, J. (2007). Export platform foreign direct investment. Journal of the European Economic Association, 5(4), 776–795.CrossRef
Kuo, H.-C., & Li, Y. (2003). A dynamic decision model of SMEs’ FDI. Journal of World Business, 52(3), 327–342.
Lu, J., & Beamish, P. (2001). The internationalization and performance of SMEs. Strategic Management Journal, 22(6–7), 565–586.CrossRef
Minda, A., & Nguyen-Huu, T. T. (2012). Les déterminants de l’investissement direct étranger d’exportation-plateforme : l’exemplaire du Vietnam. Revue Economique, 63(1), 69–91.CrossRef
Motta, M., & Norman, G. (1996). Does economic integration cause foreign direct investment? International Economic Review, 37(4), 757–783.CrossRef
Soulaimane, L. (2011). SMEs' internationalization: An analysis with the concept of resources and competencies. Journal of Innovation Economics & Management, 1(7), 181–196.
Sui, S. (2014). Internationalization strategy, firm resources and the survival of SMEs in the export market. Journal of International Business Studies, 45(7), 821–841.CrossRef
Metadata
Title
A Note on the Internationalization Strategies of SMEs
Authors
Thanh Tam Nguyen-Huu
Med Kechidi
Copyright Year
2022
Publisher
Springer Nature Singapore
Book
International Trade, Economic Development, and the Vietnamese Economy

Print ISBN: 978-981-19-0514-8

Electronic ISBN: 978-981-19-0515-5

Copyright Year: 2022

DOI
https://doi.org/10.1007/978-981-19-0515-5_5