The impact of geographic scope on SME growth

Fariborzi, Hadi (University of Sussex, Brighton, United Kingdom) ; Osiyevskyy, Oleksiy (University of Calgary, Canada) ; DaSilva, Carlos (School of Management Fribourg, HES-SO // University of Applied Sciences Western Switzerland)

The impact of international activities on SME success has been extensively studied in the vibrant literature on SME internationalization, particularly with respect to the performance and survivorship implications of sales on foreign markets. Yet, prior literature leaves largely unanswered the question of performance implications of the SME’s geographical scope (i.e., the number of countries a firm operates in), which brings substantive benefits, like access to larger markets, yet also major challenges in governance of operations. Drawing on the contemporary perspective on the internalization theory, we build the theoretical framework suggesting that theSME geographical scope has a positive impact on firm growth rate, yet also making the latter less reliable. We also suggest that this relationship is highly context-dependent, with positive benefits of the increasing scope materializing only when the firmcan manage the rising complexity of operational governance through leveraging the managerial international competencies (obtained, e.g., through international education) and constraining the geographical expansion to the familiar regions. The framework isempirically tested on data from Swiss SMEs engaged in international operations, employing the multiplicative heteroscedasticity regression model specification with endogenously modeled scope.


Keywords:
Conference Type:
full paper
Faculty:
Economie et Services
School:
HEG-FR
Institute:
Aucun institut
Subject(s):
Economie/gestion
Publisher:
Online, 1-9 July 2020
Date:
2020-07
Online
1-9 July 2020
Pagination:
45 p.
Published in:
Proceedings of the Annual Meeting of the Academy of International Business (AIB) 2020
Numeration (vol. no.):
Proceedings of the Annual Meeting of the Academy of International Business (AIB) 2020
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 Record created 2020-07-24, last modified 2020-07-27

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