Saturday, July 21, 2012

SME Survival: The Impact of Internationalization, Technology Resources, and Alliances

This research makes the following contributions to theory on SMEs survival and internationalization. First, researchs find that internationalization may not present a higher risk of failure for SMEs. Rather than increase liabilities of newness and smallness, due to “foreignness,” this expansion provides opportunities that can increase survival. In addition, there is evidence that R&D intensity may help counter these liabilities. Second, Lee , Kelley Janwgoo ( 2012 )  find that an SME’s external relationships, rather than internal resources, can buffer an SME from failure. Although the resource-based view emphasizes the importance of intangible resources, alliances may provide a broader access to resources and greater external legitimacy that can help boost SME survival.

By this , trusting these results have both practical and policy implications. Owners/managers of technology-based SMEs should be aware of the importance of external relationships and a global perspective and develop the capabilities to manage these efforts effectively. This is likely to grow in importance as SMEs, not just large multinational firms, need to compete at a global level, and as increasingly complex technology solutions require cooperation among players with complementary expertise.

For policymakers, a country’s employment and its comparative technological advantage depend on its ability to foster the development and growth prospects of SMEs. Policies enabling collaboration among firms and trade across borders can enable greater knowledge exchange, and broader and diverse markets in which firms can apply their knowledge

This can ultimately benefit a country’s economy and social well-being, and create a globally competitive business environment.

Thank you