Legal issues for internationalization

Growth-related factors seem to be a particularly important internal motivator among the SMEs investigated in these recent studies. This reflects the increasing appreciation of the growth opportunities associated with internationalization among this category of firms. It is interesting to note that in their quest for international market-led growth, SMEs increasingly seem to seek access and integration into the lucrative supply chains of international players. Another equally important endogenous motivation is the possession of critical resource factors, including knowledge resources and capabilities, by the investigated SMEs. Reflecting their status as social entities, SMEs are also motivated in their internationalization decisions by factors within their external environment, including networks and supply chain links, social ties, and the sector and region to which they belong. This appears to mitigate some of the resource-related impediments associated with SME internationalization (OECD, 2010). As noted by an example in a recent report, where Danish, Dutch, Finnish, Norwegian and Swedish enterprises form part of a global value chain and where these firms frequently gain business due to sourcing from abroad (Statistics Denmark, 2010). These resource-related factors typically take different forms, with those pertaining to managers‟ internationalization knowledge and firms‟ innovation, technological and relational capabilities seeming to be most influential. Of particular salience is the observed importance of firms sectorial and regional origin, as is the reported increasing relevance of network/social ties, and immigrant links in SME internationalization. These findings, indeed, raise the question of whether, and the extent to which, these drivers of SME internationalization behavior are factored into government support provision. The foregoing review of recent relevant evidence suggests the continuing relevance of both internal and external motivations for SME internationalization.

Network/Social Ties and Supply Chain Links

Network/Social Ties and Supply Chain Links.

A number of recent studies have highlighted the importance of network/social ties and supply chain links in triggering SMEs‟ first internationalization step and extending internationalization processes. Both North American studies particularly reported the stimulating effect on export activity of firms ‟ soft assets, including social and network capital, some of which may have accrued through managers‟ immigrant background and associated links. The study among fish exporters from the Azores Islands, an autonomous Portuguese archipelago in the North Atlantic, some 900 miles from the European mainland, highlighted the importance of family and social ties with emigrant communities in global markets in driving SME internationalization (see Boxes 3 and 4)These include research among American, Australian, Canadian and Portuguese businesses. Kocker and Buhl also observed that taking advantage of collaborative links is a common motive among the firms they investigated across ten OECD countries.
Finally, it is important to mention the value of the linkages back to their birth countries that migrants can bring in arranging exporting opportunities [OECD CFE/SME(2008)5/PART1/REV1].

Growth Motives.

Growth Motives.

Growth opportunities associated with international markets were identified as a key driver of firm internationalization in several recent studies. Orser et al. (2008), for example, reports say that after allowing for the impacts of firm size and sector, Canadian legal firms whose owners had expressed growth intentions were more than twice as likely to export, than those whose owners did not indicate growth ambitions. Firms‟ overseas venturing decision also seems to be motivated by a need for business growth, profits, an increased market size, a stronger market position, and to reduce dependence on a single or smaller number of markets. The possibility of growth in other markets and increased profit opportunities from international expansion were highlighted as key stimuli for exporting among the Australian, British, Spanish, Swedish, and US firms investigated in recent studies.