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Abstract

This study investigates the role of banks in the internationalization process of small and medium sized enterprises (SME). It first proposes a conceptual model of the effects a bank’s involvement in the internationalization activities of an SME may have and subsequently tests it. As banks may serve as facilitators for internationalizing SMEs we argue that high levels of bank involvement yield benefits to the internationalizing SME. Ceteris paribus it is therefore expected that SMEs which cooperate closely with their banks throughout their internationalization process internationalize broader and faster. The empirical results from the analysis of internationalizing Switzerland-based SMEs support this notion. SMEs that closely work with their corporate banks fare significantly better in their internationalization endeavors than their peers which do not involve banks. Moreover the involvement of banks has a positive effect on the levels of entrepreneurial orientation and the opportunity recognition capabilities of SME. The article contributes to the ongoing dialog in international business entrepreneurship literatures, especially by suggesting new antecedents to the internationalization success of SMEs.

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