Do International Networks and Foreign Market Knowledge Facilitate SME Internationalization? Evidence from the Czech Republic

Abstract

In this study we draw on the social network and international entrepreneurship literatures to examine the role of structural and relational embeddedness of international networks in firm internationalization. Based on a sample of 169 small-and medium-sized enterprises in the Czech Republic, we found that firms with chief executive officers who had developed strong and diverse international networks exhibited greater knowledge of foreign markets prior to internationalization. However, contrary to our expectations, no relationship was found between network density and such knowledge. In addition, our findings indicate that foreign market knowledge prior to the first international venture had a positive impact on venture performance.

Entrepreneurial education and internationalisation of firms in transition economies: a conceptual framework from the case of Croatia

“…In order to overcome those three relevant problems deriving from the institutional context, entrepreneurs from transition economies started to leverage their personal networks (He, 2009;Musteen et al, 2014aMusteen et al, , 2014b. Leveraging personal networks appears as principal solution to institutional problem of transition economy, and thus the most interesting characteristic of the internationalisation in these economic systems.…”

“…Thus, in transition economies, the role of financial institutions, that principally is limited to allocating some international subsidies for business, is only marginal and often completely replaced by private national or international networks (Musteen et al, 2014b). For this reason, institutions should seriously reflect upon what kind of support, programs, and ad hoc policies offered to entrepreneurs and firms that are willing to internationalise.…”

“…In order to overcome those relevant problems, entrepreneurs from transition economies started to leverage their personal networks (e.g., He, 2009;Musteen et al, 2014aMusteen et al, , 2014bRamadani et al, 2015). Personal networks and relational strategy help in overcoming and leveraging liabilities related to smallness, foreignness, and capital shortages (Zahra, 2005).…”

The “born globals” phenomenon in Czech Republic

“…For example, San Diego State University, Musteen (Musteen et al 2014), Raff, Kim (1999) and Kneller, Pisu (2011) are dealing with the problem of information shortage. Cultural distance is examined in detail by Tihanyi et al (2005).…”

Nurturing business ecosystems for growth in a foreign market: Incubating, identifying and integrating stakeholders

“…First, classic IB theories such as the stage and network approach models use a resourcedominated logic (Johanson and Vahlne, 1977;Chen and Chen, 1998;Dunning, 2001;Ji and Dimitratos, 2013;Musteen et al, 2014) to determine whether firms should internationalize or not; these models appear to have a passive attitude toward internationalization. Internationalization occurs only because the firm possesses resource advantages and the demand already exists in other overseas markets.…”