The more the merrier? : geographic scope and SME growth dynamics

Fariborzi, Hadi (University of Sussex, Brighton, United Kingdom) ; 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, but also major challenges in the governance of operations. Drawing on the contemporary perspective on internalization theory, we build a theoretical framework suggesting that the SME geographical scope has a positive impact on firm growth rate, yet 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 firm can 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 familiar regions. The framework is empirically tested on data from Swiss SMEs engaged in international operations, employing the multiplicative heteroscedasticity regression model specification with endogenously modeled scope.

Note: Due to the COVID-19 outbreak, the 80th Annual Meeting of the Academy of Management in Vancouver was cancelled. The proceedings of the online conference are however published according to the original schedule.

Conference Type:
full paper
Economie et Services
Aucun institut
Vancouver, Canada, 7-11 August 2020
Vancouver, Canada
7-11 August 2020
29 p.
Published in:
Proceedings of the 80th Annual Meeting of the Academy of Management
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Note: The status of this file is: restricted

 Record created 2020-10-05, last modified 2020-10-27

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