Pathways of SME internationalization: a bibliometric and systematic review

Estimates suggest that more than 95% of enterprises across the world are small and medium enterprises (SMEs), and these contribute up to 60% of employment and up to 40% of GDP (Bell 2015). Thus, SMEs represent the backbone of national economic systems, but it is relatively recent that SMEs and multinational corporations (MNCs) share the same competitive space; less than two decades ago, Etemad et al. were observing how “competition in international markets was traditionally the realm of large companies, with smaller businesses remaining local or regional (2001, p. 481).” Indeed, for several reasons, such statement no longer applies because the world has become more competitive and increasingly globalized, making it necessary for SMEs to look outside of their national borders to survive (Lee et al. 2012). Similarly, the rapid development of technology has made internationalization strategies more accessible to SMEs. Remote working, artificial intelligence, the IoT, mobile apps, and social media have contributed to providing SMEs with more agile tools for expansion and internationalization (e.g., (Caputo et al. 2016a; Lee et al. 2012)). Such technological advancements are allowing for more integrated supply chains and speedy contacts with suppliers, contractors, and partners (Mangematin et al. 2003) and at the same time are reducing physical distances, thus allowing for a better reachability of markets, users, and potential customers, which were never imaginable for often limited-endowed companies such as SMEs (Musteen et al. 2014).

Given all these changes impacting the internationalization capacity of SMEs, several questions arise. What is the current state of the knowledge about internationalization of SMEs and international entrepreneurship? How has the internationalization of SMEs been researched and what findings have been produced? What lessons can we learn from this body of knowledge? This article aims at answering those questions by offering a timely and necessary review of the literature on internationalization of SMEs through a bibliometric methodology, which offers a systematic and comprehensive picture of what we know.

This study provides theoretical, practical, and methodological contributions. First, opposite of Keupp and Gassmann (Keupp and Gassmann 2009) and Jones et al. (Jones et al. 2011) which focused on international entrepreneurship research, we contribute to both the internationalization literature and the entrepreneurship literature by bridging the two together and integrating their findings when studying internationalization of SMEs. Second, we bring order, clarity, and systematization on the subject of internationalization of SMEs by identifying three level of analysis. The subject level, which investigates the main studied topics so far, and is composed of (1) knowledge transfer, (2) human resource development, and (3) refocusing geographical attention. The theoretical level, which investigates the theoretical foundations of the review studies, identified six main theoretical streams: (1) Uppsala model, (2) born global literature, (3) network theory, (4) transaction cost theory (TCT), (5) entrepreneurial theory, and (6) resource-based view (RBV). The method level investigates which methods have been deployed by previous scholars. Third, we deploy an innovative method for reviewing the literature, which improves rigor and allows for a big picture to be presented without neglecting attention to the details. We contribute to the theoretical advancement of the field by integrating our findings in a research agenda, a key aspect for future scholars to bring the study of internationalization of SME further. Having introduced the topic and its relevance, this study proceeds explaining the methods used both for the bibliometric and systematic literature reviews, and it keeps this separation also in presenting the results (bibliometric analysis and the systematic review). Finally, our discussion concludes the paper showing possible areas to be addressed further.

The debate on SMEs, internationalization and globalization, can be traced back to more than 40 years ago (e.g., (Bilkey and Tesar 1977; Coviello and McAuley 1999; McDougall and Oviatt 1996)), and since then, it has received increased attention (e.g., (Bratkovic et al. 2009); Keupp and Gassman 2009; (Jones et al. 2011)). There are many sub-topics or subfields of studies in this field, ranging from international entrepreneurship (e.g., (Oviatt and McDougall 2005)) to entry modes (e.g., (Brouthers and Nakos 2004)), strategies or resources used to internationalize (e.g., (Lu and Beamish 2001)), and Welch and Luostarinen (Welch and Luostarinen 1988) an “innovation-related internationalization model”–related research. Despite evident similarities in the investigated phenomena, each of such areas has often used a heterogeneity of concepts and knowledge bases to develop their discussion (García-Lillo et al. 2017). Thus, this fragmentation may miss to stress interconnections and synergies that different subfields may bring to the general discussion, lacking a systematic and comprehensive analysis of the spectrum of the phenomenon of internationalization of SMEs. Scholars have tended to specialize on one single domain only, but the actual state of knowledge is sufficiently developed to require a more serious effort to integrate and cross-fertilize each domain (Coviello and Jones 2004). The literature can be initially scanned to find the main theoretical aspects which lead the actual debate and represent the foundation paradigms.

In terms of entry modes, the stage models introduced by the Uppsala school (Johanson and Vahlne 1977; Johanson and Vahlne 2009; Johanson and Wiedersheim-Paul 1975) argue that firms pursue internationalization in a slow and incremental fashion. In contrast, the models of rapid internationalization—including the literature on born global, born regional, and international new ventures (Cavusgil and Knight 2015; Madsen and Servais 1997; Oviatt and McDougall 1994; Oviatt and McDougall 2005; Rialp et al. 2005)—argue that many firms do not follow an incremental stage approach but rather start their international activities from an early stage of life. However, the interplay of globalization pressures, local market conditions, and technology advancements may force SMEs to adapt to abrupt shifts in the competitive arena and be less able to take a deliberate and stable decision (Dana 2001).

In terms of theoretical perspectives, the resource-based view (RBV) perspective (Barney 1991; Wernerfelt 1984) is used to explain the internationalization of a SME (McDougall et al. 1994) by looking at resources and characteristics that SMEs may employ to grant them success in going abroad or global. As Young et al. noted, “explanations for the emergence and growth of international entrepreneurial firms largely focus on the resource-based view and the network perspective. While these approaches are useful, we suggest that IE would benefit significantly from a greater emphasis on its ‘international nature’. Therefore, theories of international business should be employed in conjunction with other approaches ((Young et al. 2003), p. 31).” Yet also other authors (e.g., (Priem and Butler 2001)) are more cautious in fully espousing the RBV paradigm since they highlight how these assumptions need to be balanced by external factors. The network strategy approach becomes very useful to understand the bootstrapping capacity of entrepreneurs and SMEs in terms of strategic alliances and joint ventures ((Dabic and Bach 2008); Ratten et al. 2007) and social capital as a vehicle for expansion and success (Musteen et al. 2014). Finally, transaction cost theory has also been used to explain why SMEs engage in internationalization (Ruzzier et al. 2006), where both antecedents and consequences of the decision of internationalization have been associated as a response to market failures (Brouthers and Nakos 2004). The relation between multinational enterprises (MNEs) and SMEs with the dilemma of cooperating or being absorbed is a central aspect under investigation by such studies (Mangematin et al. 2003). Even though other internationalization theories refer to the firm response to market failure, the unit of analysis is different. In transaction cost studies, the unit of analysis is the transaction itself and not the firm (Ruzzier et al. 2006). However, these assumptions have been frequently tested at an aggerated level (Coviello and Jones 2004), leaving less space for an interpretivist approach able to address cognitive reactions to the local market conditions.

If theoretically speaking these are the main subfields, another important angle for studying SMEs and their internationalization paths is related to the geographical location of the firms and contextual factors. There is a paucity of studies to take fully into account the antecedents and consequences of the embedded local or national conditions in which SMEs operate (Bloch and Bhattacharya 2016). For example, proximity, in terms of language, culture, and geographical distance, has often been regarded as positive related to the odds of success of an internationalization strategy adopted by SMEs (Caputo et al. 2016b). This is probably related to a concrete difficulty of SMEs, mostly due to resource constraints, to span into “distant” domains either in terms of markets, culture, legislations, etc. (Buckley and Ghauri 2004). For example, SMEs face legitimacy, economic, and resource dependence challenges in attracting and retailing talents that can help foster successful internationalization (Krishnan and Scullion 2017). Ribau et al. (Ribau et al. 2018) in recent study tried to map the field of internationalization of SMEs focused on the period between 1977 and 2014. Despite the growing interest in internationalization of SMEs and the relevant findings of this growing body of literature, the research is still fragmented and far from conclusive.

For all these reasons, we believe that this review is necessary to reconcile the various ways in which internationalization has been studied. We aim to contribute to the gap in the literature using a sequential mix method approach, based on a bibliometric analysis of the literature, followed by a systematic review, consistent with recent suggestions that the methodological rigor of literature reviews should be strengthened in management studies (e.g., (Denyer and Neely 2004; Thorpe et al. 2005; Tranfield et al. 2003)). More recent studies have also moved forward from the standard systematic literature review process in the search for more objectivity on article selection and categorization, resulting in the combination of bibliometric analysis of keywords and qualitative analysis of content (e.g., (Keupp et al. 2012; Saggese et al. 2016)). We agree with such approach as it brings the benefit of capturing a broader picture of the phenomenon (from the bibliometric analysis), showing structural dimensions of the knowledge bases used in the field and the individuation of similarities or schools (e.g., (García-Lillo et al. 2017)), with the benefit of the in-depth investigation of the findings and theoretical advancements of the reviewed studies (e.g., (Tranfield et al. 2003)).

For the purpose of this paper, a mix of bibliometrics, content analysis, and systemic literature review tools has been used. Bibliometric analysis is based on the quantitative methods of multiple correspondences (Dabic et al. 2014; Dabic et al. 2015; Gonzalez-Loureiro et al. 2015; Gonzalez-Loureiro et al. 2017; López-Duarte et al. 2016) creating objective and useful information for scientists interested in the specific field while the literature review is based on the content analysis of selected papers (Duriau et al. 2007; Khoo et al. 2011; Seuring and Gold 2012). With respect to data coding, Short and Palmer (Short and Palmer 2008) categorize content analysis into three methods: “human-scored systems, individual word count systems, and computerized systems that use artificial intelligence.” We combined computer-aided techniques, avoiding researcher bias and individual word count system in coding necessary for multiple correspondence analysis (MCA).

First, we consider the consistency of the evolution of the field. Counting the number of papers published per year in the period of January 1992 to June 2017, the development of the field in question is quite visible (Fig. 2).

Among the influential journals are Journal of International Entrepreneruship (37), International Business Review (33), International Marketing Review (28), Journal of Small Business Management (20), International Small Business Journal (18), Small Business Economics (17), and Journal of World Business (17) (see Table 1).

Reflecting on the total number of citations, forerunner authors of the field are the following: Wright, M. (617), Westhead, P. (589), Ucbasaran, D. (588), Bell, J. (442), Fernandez, Z. (386), Nieto, MJ. (386), Lee, S. (383), Igbaria (343), Iiviari (343), Antoncic (340), and Rruzzier (340) (all of them having more than 340 citations). Considering coauthorships, most influential authors tend to work together, e.g., Wrigth has a total of 5 papers published while four of them is coauthored with at least one of two other most influential authors: Westhead, P. and Ucbasaran, D. Titles of the most cited papers were the following: “The internationalization of new and small firms: A resource-based view” and “Internationalization of small and medium-sized enterprises (SMEs) and international entrepreneurship: A critique and policy implications and International market selection strategies selected by ‘micro’ and ‘small’ firms,” published respectively in Journal of Business Venturing, Regional studies, and Omega-International Journal of Management Science. Furthermore, Bell, J. published a total of seven papers while four of them were coauthored with Loane, S. Other most influential authors were Park, G. (336), Park, J. (336), Yoon, B. (336), Pett, TL. (324), Wolff, JA. (324), Jones, M.V. (293), Hisrich, RD. (291), Loane, S. (287), and Crick, D. (272) (see Table 2).

To gain more insights into the journals’ impact, the entire research period is divided into six periods (Table 3). The first period from 1992 to 2005was dominated by JSBM (Journal of Small Business Management), SBE (Small Business Economics), and JIM (Journal of International Marketing). The second period (2004–2009) was dominated by IMR (International Marketing Review), JSB (Journal of Small Business Management), and JSBED (Journal of Small Business and Enterprise Development). The third period (2010–2013) is dominated by ISBJ (International Small Business Journal), SBE (Small Business Economics), and ERD (Entrepreneurship and Regional Development). The fourth period (2010–2014) is dominated by JIE (Journal of International Economics) and ERD. The last periods (2015–2018) were the most productive encompassing 47.2% of all records for the selected journals with journals such as Journal of International Economics, International Business Review, International Marketing Review, and Journal of World Business.

For the purpose of mapping this research field, Fig. 3 is showing the two-dimensional map of the themes represented in the sampled records. Descriptors are derived from author’s keywords and Keywords Plus given by the WOS database. Sets of these unique topics were compared against each record’s title, abstract, and keywords creating a data matrix. Rows of this matrix are papers and columns are topics; the matrix is composed of zeroes and ones resulting from the crossing of the two dimensions: 1 if the topic is included in a certain record and 0 if the topic is not included. The matrix was filtered for most relevant topics, so those that are found in at least 5% of the papers were analyzed, and then it has been used to run a multiple correspondence analysis. This analysis was performed by using HOMALS (homogeneity analysis by means of alternating least squares) command in SPSS.¹ Such analysis yielded the two-dimensional coordinates of each keyword, where two-dimensional coordinates result from the frequencies of their mutual appearances in the sampled papers and the “bubble” is their absolute frequency of appearances. The two-dimensional map demonstrated research topics arranged in three distinctive streams. The first and one of the most pertinent research streams deals with performance including topics such as marketing, management, entrepreneurship, performance, relationships, resources, network, experience, and market. The second, also one of the most important research streams, is about manufacturing including topics such as innovation, technology, industry, development, competition, advantage, and quality. Finally, the third stream is about institutions including topics such as Europe, China, barriers, integration, production, and trade.

In order to get additional information about the study methods in this field, Fig. 4 is demonstrating the frequency of each topic and its particular distance to quantitative study marker. Quantitative marker is designed as a combination of various keywords representing the quantitative type of study: quantitative, regression, correlation, panel analysis, panel data, statistic, numerical, econometrics, mathematics, convexity, Lagrange, standard error, general equilibrium, heteroscedastic, game theory, optimization, least square, linear, non*linear, geometric, rational choice theory, equation, and Bayesian. Coordinates derived for for the construction of the intellectual map were used to calculate distances between each topic and constructed qualitative study marker. The entire figure may be divided into four quadrants. The top left quadrant is about topics of low interest for further quantitative studies in the field (high frequency, low distance) which are considered significantly researched. The bottom left quadrant is about emerging topics and possible gaps in the literature. The bottom right quadrant is about relevant gaps in quantitative studies of the field, and finally the top right quadrant is about popular topics and relevant gaps in quantitative studies. According to the results in Fig. 4, topics of low interest are strategy, market, export, performance, relationships, development, network, entrepreneur, knowledge, foreign, resource-based view, and policy. Emerging topics and possible gaps in the literature are new ventures, growth, location, emerging, opportunities, risk, marketing, manufacturing, learning, information, capabilities, success, government, public, barriers, and Europe. Relevant gaps in qualitative studies are e-business, service, entry, cooperation, cluster, trade, and institutions. Finally, popular topics and relevant gaps in quantitative studies are technology, competition, management, and innovation.

Our systematic review classifies SME and IE research findings into three categories: subjects, theories, and methods (Table 4).

Our systematic and thorough review of the literature identifies important progress in understanding the internationalization of SMEs. There is mounting evidence that certain SME activities can greatly impact their ability to internationalize. Yet, at the same time, our review also reveals that the bulk of the SME literature is very fragmented (Cerchione et al. 2016; Nolan and Garavan 2016; Stoian et al. 2018), and there are substantial knowledge gaps at subject level, theoretical level, and methodological level. These three levels will now be discussed in more detail.

Our review of the existing body of SME internationalization research reveals ample opportunities for future examination, and owing to the under-researched phenomenon of certain aspects of SME internationalization, the results of this study open up several new questions. Following the structure of the above review of the current status of research, we highlight knowledge gaps and suggest directions for future research with respect to (1) subject, (2) theory, and (3) methodology.

At the subject level, there remains much to be done in terms of improving our understanding of how best human capital can be developed to increase the chances of successful internationalization of SMEs. Human capital theory could be integrated with economic perspectives to assess the importance of different types of human capital for translating entrepreneurship into growth (Terjesen et al. 2016a, b). Likewise, HRD as a competitive advantage could also have great scope for future SME researchers. For example, the strategic management of talent in SMEs has emerged as a critical element and is almost a tabula rasa for future SME scholars. The theme of exclusive or inclusive TM could have wider implications for the SME internationalization, and while we think that this is an important debate, we would like to highlight that in regard to SMEs, we reject the prescriptive exclusive approach to TM so often prevalent in the TM literature. Nonetheless, we add the ROI of TM ambitions needs further examination, and it is important to stress that for HRD and TM to be championed as valuable disciplines by SMEs, their relationship with business performance and ultimately the bottom line must be simplified and understood. In other words, more work needs to be done across the sustainable benefits of firm-specific competencies and capabilities that SMEs develop. Consequently, scholars need to position the benefits of HRD in internationalization by expounding its value—both short term and long term in order to be understood by entrepreneurs and managers of SMEs. In general, research must consider the restraints and ambiguities facing HRD and the management of talent in SMEs and recognize that these processes differ greatly from the issues bounding HRD and talent in MNCs. Furthermore, few studies have analyzed the conjuncture of culture and effective internationalization, leaving an obvious calling for more research in this area, for example, an examination of national culture in regard to how mind-set, motivation, and ambition are formed by a particular culture. Focusing on these knowledge gaps could be important to understand the full set of human capital theory components involved in internationalization of SMEs in order to develop optimal SME internationalization strategies in different country settings. There is also considerable scope for SME scholars to develop KM transfer studies in SME internationalization. Problem solving strategies are needed to improve the SME’s ability to acquire external knowledge, create external networks, manage the complexities of global mobility, and enable internationalization. Consequently, further studies should shed light on the knowledge transfer in relation to problem-solving strategies in internalization. Importantly, the three subject categories (HRD, TM, and KM) are not independent, and there is a degree of dependence between the future proposed research themes.

At the theory level, scholars need to investigate the suitability and boundaries of the RBV for SME and IE research by considering the characteristics of these disciplines and how they may affect the operational validity of the RBV for practitioners. Research may also benefit from a “complex RBV” (Colbert 2004) including extensions and combinations of RBV—such as permutations of the RBV, dynamic capabilities theory, and absorptive capacity. Dynamic capabilities (Teece 2007) have started to receive attention from researchers; there remains more scope for this useful theory. It involves resource development and renewal and is particularly pertinent to SMEs. According to Cepeda-Carrion et al. (Cepeda-Carrion et al. 2012), a firm’s absorptive capacity involves engaging in new practices; hence, employees need to have the flexibility to adapt to new practices that are likely to differ from those that already exist and are familiar. Therefore, a fundamental premise of absorptive capacity is that the firm will be more flexible and innovative through obtaining and applying external knowledge. Thus, we see that there is further latitude for SME studies encompassing dynamic capabilities and absorptive capacity. Overall, we contend that there is ample scope to build on RBV in relation to SME and entrepreneurship and also for the development of completely new theories. Indeed, there is a clear call for new models using a wider variety of theories in order to explain and expand the phenomenon of internationalization. Moreover, these new scholarships could build on concepts such as the complex RBV, advance the application of network theory, or develop novel theories relevant to SME internationalization. As suggested by Terjesen et al. (2016a, b, p.13), researchers could borrow theories from management, international business, entrepreneurship strategy, economics, finance, and sociology.

At the method level, we suggest greater attention be placed on qualitative studies. The use of qualitative methods is argued to hold much promise in international business studies (Birkinshaw et al. 2011). While the literature has developed some noteworthy models, we argue that these tend to be broad-spectrum with largely untested propositions. The numerous quantitative studies we analyzed invariably tested theories; they did not develop new theories; qualitative research is essentially an inductive approach to theory generation. The emphasis veers to dynamic processes, with the purpose of clarifying, rather than predicting phenomena (Leavy 1994). Consequently, qualitative studies are desperately needed to develop new theories and increase “explanatory” power. It is evident in SME and IE studies that we need to know more about “how” and this is answered by qualitative studies. Qualitative methodology is appropriate for exploratory studies (Creswell 2013) and could be particularly helpful to improve our understanding of SMEs (Shavelson et al. 2002) and could help verify concepts or refute them (Flyvbjerg 2006). Case study methodology could also be useful in SMEs and may help with theory extension (Piekkari and Welch 2011).

For example, SME qualitative researchers could interview owner-managers to establish important matters in SMEs. Additionally, we urge scholars and practitioners to work together and across countries, cooperating with interested agencies and associations to develop new longitudinal, multilevel data sets and introduce dual qualitative/quantitative approaches and new diverse, sophisticated analytical tools. An interactive Delphi process could be employed to seek the opinions of a panel of experts on the research priorities for SMEs and IEs. The Delphi process was established by the Rand Corporation during the cold war to forecast the impact of technology on warfare. It is an interactive forecasting method based on the opinions of selected experts. The content analysis of the results could conceivably identify novel directions for future research in the SMR and IE field. According to Dana and Wright (Dana and Wright 2008), the compilation of the recommendations received from the panelists could provide a wealth of ideas and guidelines for specific research projects. Additionally, more longitudinal studies could be helpful in examining SMEs over an extended period and may be useful in identifying differences in challenges over time (Terjesen et al. 2016a, b).

Figure 5 summarizes the individual topical opportunities. This agenda exemplifies that there is a necessity for more in-depth research to both augment theory building and afford new academic visions for SME internationalization research at the various levels discussed above. In this way, future research will construct valuable typologies and paradigms that help the managers of SMEs to better understand the challenges of internationalization.

This paper has focused on the pathways of SME internationalization. Clear evidence was found that demonstrates that the SME and entrepreneurship literature is highly fragmented with substantial knowledge gaps related to content, theory, and methodology, for which we outline a detailed future research agenda. Thus, this paper makes important contributions to the literature in terms of extending the current dominant theoretical perspectives. Firstly, it proposes that there is a heterogeneous nature of SME and entrepreneurship within countries. Secondly, the heterogeneous nature helps explain outcomes at firm level (e.g., financial and export performance) and country level (e.g., economic growth), as well as antecedents at the country level (e.g., certain aspects of cultural differences). Thirdly, it proposes new lenses from management, international business, and entrepreneurship. We believe this is a valuable endeavor as it will, we hope, influence more focused empirical research.

The main limitation comes from our initial search. We focused only on articles and review covered by Web of Science Core Collection, but that database does not cover all journals from their foundation.