Internationalisation of SMEs and Distant Markets: The Networking and Service Functions of Global Cities

Since the early 2000s, about 100 cities are ranked annually as global cities. This chapter explores a frontier research issue dealing with the functional role of global cities in the internationalisation of firms—and of SMEs in particular. First, an interdisciplinary conceptual research framework is proposed with inputs from international business management on the one hand, and from economic geography, urban sociology, and international development economics on the other hand. Secondly, the chapter reviews how recent studies of global cities use mixed quantitative/qualitative research methods. Such methods measure the concentration of international business activities in major urban hubs worldwide and their global interconnectivity supporting international finance, innovation, technology, and trade. They enable to quantify the size of manufacturing and service activities, run mainly by multinational firms established in global cities, and to qualify the variety of highly specialised functions of global cities facilitating international business developments at regional and intercontinental levels. Thirdly, the authors explore existing knowledge on incremental SME internationalisation theories. The supportive role of advanced producer services (APS) concentrated in global cities is considered. An empirical research scheme is presented in order to explain how relevant SME data can be collected and analysed. It can produce tangible results to demonstrate that global cities act as specialised entrepreneurial ecosystems to promote not only multinational corporations but also the internationalisation of SMEs and globally born start-ups with the help of various forms of APS. Illustrations can be derived from the service functions of global cities in developed countries and in emerging economies as well.