Internationalization and Innovation: Growth Strategies for SMEs
MetadataShow full item record
This dissertation studies internationalization and innovation as two of the main growth strategies pursued by SMEs and investigates the relationship between them. Adopting these strategies can create numerous opportunities for companies seeking growth in the modern business economy. Even though the two strategies are not mutually exclusive—and they certainly are not perceived that way by managers—they are predominantly studied independently from each other in the scholarly literature investigating firms’ growth. This is arguably one of the most evident research gaps in the fields of international business and innovation since there are many theoretical and practical reasons to believe that the two strategies can be related to each other. As a paper-based thesis, this dissertation consists of four studies with their own related research questions, theoretical lenses and research designs which illuminate different facets of the firms’ success in foreign markets. When developing the studies, not only has it been important to investigate the relationship between internationalization and innovation but also the determinants that can affect them and their outcomes. The empirical context of the dissertation is Norway. Paper 1 aims to identify the mechanisms of interaction between innovation and export activities in SMEs based on the empirical literature investigating the relationship between them. As the results of the comprehensive carried out literature review indicate, the two strategies can be mutually reinforcing through different sets of mechanisms. Paper 2 quantitively investigates the firms’ growth ambition as the antecedent and export performance as the outcome of the firms’ innovation strategies. The statistical analysis results indicate positive and significant associations between the firms’ growth ambition and product and business model innovations. Besides, the firms’ product innovation strategy is positively and significantly associated with their export degree and scope. Paper 3 quantitatively examines the differential effects of internationalization and knowledge integration on SMEs’ innovation capabilities and firm performance. The study’s findings show that it is the level of knowledge integration rather than the degree of internationalization that determines the range of sources for knowledge acquisition and the innovation capabilities of international SMEs. However, both the degree of internationalization and knowledge integration are efficient differentiators for firm performance. Paper 4 aims to qualitatively investigate the significance of the two strategies in an industrial setting. For this purpose, the establishment of new internationally competitive industries—Born Global industries—with innovative technological offerings, albeit in the absence of favorable structural conditions, is researched. The results of the fourth study indicate that, in the absence of favorable structural factors (e.g., home market effects, localized capabilities, etc.), resourceful actors such as risk-taking, internationally ambitious, and technically competent entrepreneurs and their firms can contribute to the birth and development of the industry. The findings embrace the fundamental role of the state as an entrepreneurial agent; they also appreciate the role of interaction between research institutions and universities in building knowledge platforms and nurturing environments that the international entrepreneurs and their firms can draw on for their success. Based on the theoretical arguments and empirical investigations carried out in this dissertation, it can be primarily concluded that internationalization and innovation are two highly pursued growth strategies by SMEs, which also reinforce each other through different sets of mechanisms. By pursuing an integrated internationalization-innovation (I3) strategy (i.e., the mixed growth strategy formed by the concurrent implementation of internationalization and innovation), SMEs can not only take advantage of their distinct benefits but also strengthen their position in either of the strategies through the other one. The initiation and successful implementation of the strategies in the firms are influenced by different factors, among which growth ambitions and knowledge management activities are investigated in this dissertation. Finally, it was found that in addition to improving firm performance, the concurrent implementation of the strategies can contribute to society. In fact, the fruit of undertaking the I3 strategy is not limited to the firm level, and they can also be harvested at industrial and national levels.