[International SMEs Experience on Foreign Intensity and Economic Performance]

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ACKNOWLEDGEMENT

I would take this opportunity to thank my research supervisor, family and friends for their support and guidance without which this research would not have been possible

DECLARATION

I, [type your full first names and surname here], declare that the contents of this dissertation/thesis represent my own unaided work, and that the dissertation/thesis has not previously been submitted for academic examination towards any qualification. Furthermore, it represents my own opinions and not necessarily those of the University

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ABSTRACT

In this paper, we will study the relationship between the international experience of small and medium-sized enterprises (SMEs) and their economic performance using intangible and financial asset stock, competitive strategy, and international intensity as mediating factors. The RBV will provide the theoretical framework to develop a theoretical model postulating that international experience has an indirect effect on foreign growth and economic performance. This model will be used to test a sample of 394 Spanish SMEs through the modelization of a structural equations system. Do small and medium-sized enterprises (SMEs) with international experience obtain higher profits than other SMEs? The academic jury is still out on this question; there are contradictions in the empirical literature on the direct effects of experience on performance that have been highlighted in previous reviews of the state of the art. Our work will show that greater economic performance due to international growth will not result from SMEs' international experience alone. We will hypothesize that international experience will only be transformed into outstanding results when the firm takes full advantage of this learning to increase its stock of internationally exploitable intangible assets (irrespective of the fact that these assets form the basis for strengthening international intensity) or to direct its competitive strategy toward differentiation.

TABLE OF CONTENT

ACKNOWLEDGEMENTii

DECLARATIONiii

ABSTRACTiv

CHAPTER 1: INTRODUCTION6

CHAPTER 2: LITERATURE REVIEW8

International Experience and Stock of Assets8

Strategizing for SME Business Success9

Strategic Planning in New Ventures and Young SMEs10

CHAPTER 3: METHODOLOGY12

REFERENCES14

CHAPTER 1: INTRODUCTION

Traditionally, SMEs have restrained their internationalization processes because they are considered to be particularly precarious, and they must face greater risks than large firms. The empirical evidence shows with different indicators that SMEs are less likely to enter international markets: only 8 percent of European SMEs export, and the most common forms of internationalization are low-committed. Nonetheless, SMEs are currently facing a new competitive dynamic in that their competitivity depends on their capacity to grow internationally; consequently, SMEs are more active in international markets that ever before (Krake, 2005, 228).

Many studies have examined how SMEs behave before and during the international expansion process. The importance of international experience in internationalization processes has been highlighted since the Uppsala Model appeared. This model, known as the U-Model, has provided an attractive explanation for the traditional internationalization of firms. An underlying assumption of this model is that the more firms learn (about a given market), the more committed they will be to investing more assets in this market. Here, internationalization is contemplated as an incremental process that adjusts to the environment in question, and ...