Pathways of SME internationalization: a bibliometric and systematic review

Business is dynamic and rapidly changing. Global markets were previously the playing field of multinational corporations (MNCs), while small and medium enterprises (SMEs) were local; however, the removal of imposed barriers and recent technological advances in manufacturing, transportation, and communications have indorsed SMEs and international entrepreneurs (IEs) global access. SMEs and IEs are increasingly fueling economic growth and innovation, and these trends are presenting both opportunities and challenges to both MNCs and SMEs in the global arena. This review systematically examines comparative SME and IE research, analyzing (after fine-tuning) 762 articles published in leading journals from 1992 to September 2018. Our bibliometric and systematic review classifies SME and IE research findings into three echelons: (i) subjects, (ii) theories, and (iii) methods.

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1 Introduction

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.

2 Theoretical background

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)).

3 Method

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).

3.1 Data collection

To create an illustrative map of the scientific domain of internationalization of SMEs, a sample of papers was gathered through one of the most relevant scientific citation databases Web of Science Core Collection database, which included indexes such as SCI-EXPANDED, SSCI, A&HCI, CPCI-S, CPCI-SSH, BKCI-S, BKCI-SSH, ESCI, CCR-EXPANDED, and IC. The first search was performed in June 2017, second in January 2018, and the final search was performed in September 2018.

The initial topic search string was composed of two parts: the first focuses on SMEs using: SME OR “small firm*” OR “small business*” OR “medium firm*” OR “medium business*” and the second focuses on identifying processes of internationalization, using globali?ation OR “born global” OR internationali?ation, where question marks were used as wildcards replacing any sign for the position. The total number of returned papers in all years from the query was 908. To isolate most relevant records (Castillo-Vergara et al. 2018), this first result was refined by excluding proceedings papers (145), book chapters (38), editorial material (4), book reviews (3), news item (2), books (1), reprints (1), meeting abstracts (1), and corrections (1). The final number of records after the filtering process leaves only articles and reviews. After this step, a more detailed control of titles, keywords, and abstracts was performed independently by each author. After fine-tuning, 762 articles were analyzed.

3.2 Data preparation

After examining all the records obtained by the search, further process extracted a list of keywords combining two Web of Science Core Collection database categories: author’s keywords and Keywords Plus. These keywords have been filtered for duplicates, and only unique values were used for cross-referencing the sample of gathered records. Following Hoffman and De Leeuw (Hoffman and de Leeuw 1992), a matrix was created by examining the presence of each unique keyword in every record. Each record included titles, abstracts, and keywords of selected papers and reviews. If the record did contain a keyword, the returned value was “1” and if not “0.” The first row of the matrix was about the keywords, the first column of the matrix was about the text of each record, and finally appropriate fields on their cross-section were about the binary values depending on the presence of the keyword in the text of each record. According to Gaur and Kumar (Gaur and Kumar 2018), content analysis involves “coding target textual data that is central to the qualitative data analysis (Drisko and Maschi 2016) and then subsequent summarization and analysis of the coded text.”

3.3 Software application

By using the IBM SPSS Software we conducted a multiple correspondence analysis (MCA), as per Furrer and Sollberger (Furrer and Sollberger 2007) and Furrer et al. (Furrer et al. 2008). As explained by Benzécri (Benzécri 1982), Hoffman and Franke (Hoffman and Franke 1986), and Lebart et al. (Lebart et al. 1984), MCA is an exploratory data analysis technique for the graphical display of multivariate categorical data, allowing us to analyze interdependence among a set of categorical variables. This is similar to principal component analysis (Hoffman et al. 1994). MCA resulted in two dimensional coordinates of each keyword derived as a result of their mutual appearances in the selected records. Using the keywords’ coordinates and their frequency of appearance, the first two-dimensional map of the selected research field was illustrated (axis x: first coordinate; axis y: second coordinate; size of the keyword’s bubble: frequency of the records including the keyword). The map is demonstrating topic clustering and their importance in the selected field which is derived from the size of each keyword’s bubble. Additional insights were accomplished by using previously calculated two-dimensional coordinates of each keyword and calculating their distance to the quantitative research marker (Gonzalez-Loureiro et al. 2015). The marker was designed by using relevant terms: quantitative, regression, correlate, panel analysis, panel data, statistics, numerical, econometrics, mathematics, minimax, vector measure, convexity, Lagrange, standard error, general equilibrium, heteroscedastic, game theory, optimization, dummy, least square linear, non*linear, geometric, rational choice theory, equation, and Bayesian. Distance was calculated on the basis of a Euclidian distance:

$$ d\left( di, dj\right)=\sqrt<<\left(_-_\right)>^2+<\left(_-_\right)>^2> $$

Using distance data (axis x: distance to the marker, axis y: frequency of the records including the keyword) enabled illustrating the second two-dimensional map of the selected research field. This provided an indication of the quantitative nature of research on internationalization of SMEs. The used protocol is summarized in Fig. 1.

figure 1

4 Bibliometric results

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).

figure 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).

figure 3

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.

figure 4

5 Systematic literature review results

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

figure 5

8 Conclusion

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.

Notes

References

Author information

Authors and Affiliations

  1. Faculty of Economics and Business, University of Zagreb, J. F. Kennedy Square 6, HR-10000, Zagreb, Croatia Marina Dabić & Ivan Novak
  2. Business School, Nottingham Trent University, Burton Street, Nottingham, NG1 4BU, UK Marina Dabić
  3. Department of Management, Faculty of Business and Economics, Macquarie University, Sydney, Australia Jane Maley
  4. Groupe Sup de Co Montpellier Business School, 2300 Avenue des Moulins, 34185, Montpellier Cedex 4, Montpellier, France Leo-Paul Dana
  5. Faculty of Economics, Rome, University of Rome “Tor Vergata”, Rome, Italy Massimiliano M. Pellegrini
  6. Lincoln International Business School, University of Lincoln, Lincoln, UK Andrea Caputo
  1. Marina Dabić