The Pace of Internationalization for Small and Medium-sized Enterprises

The purpose of this study is to describe the process of internationalization of SMEs and to explore the reasons for the differences in the pace of internationalization of firms. Empirical evidence, from many countries, supports the notion that firms often internationalize by benefiting from what they learn by experience, i.e., their market knowledge increases gradually and uncertainty and risk is reduced over time for each new country. However, in 1988 Johanson and Mattson pointed out that some firms follow other internationalization patterns. They argued that the degree of internationalization of markets (i.e., the frequency, intensity and integration of relationships across borders in the particular industry market) has an impact on the internationalization process of the individual firm. In highly internationalized markets, firms may leapfrog some of the stages in the learning process. More recently, many authors (e.g., Knight and Cavusgil, 1996; Madsen et al., 2000; Oviatt and McDougall, 1994) have found empirical evidence of yet another type. Some exporters are born global. These are firms that aim at international markets or even the global market from their inception. They do not seem to follow any kind of staged learning process leading to internationalization, i.e., their behaviour is beyond leapfrogging.