Entry Mode Research and SMEs: A Review and Future Research Agenda

Abstract

Research on SMEs' entry modes remains limited and is spread across various, often disconnected research fields using a broad variety of theories, sample characteristics, and methods. This makes it challenging for researchers to identify interesting research opportunities. Our study investigates the current state of the SME entry mode literature by conducting a systematic literature review of 47 articles. Our review shows that scholars should be more careful when conceptualizing SMEs, and we recommend the use of both quantitative and qualitative longitudinal research designs. We explain how new theories and perspectives might address existing problems and weaknesses in this literature.

Interpersonal Social Networks and Internationalization of Traditional SMEs

“…The process of internationalization for small and medium‐sized enterprises (SMEs) has attracted increasing attention from Entrepreneurship literature (Bruneel and De Cock ; Kuivalainen et al ; McAuley ). This is not surprising, considering that in the current “globalized” environment, many SMEs are rapidly accessing international markets (European Commission ).…”

“…Scholars have emphasized that social networks are crucial for SMEs since in such firms, many decisions, including those concerning international growth, often depend upon a single person, with her capital of knowledge, experience, and, crucially, relationships. Among other webs of ties, entrepreneurs’ networks are particularly critical because the entrepreneurs in small firms have greater discretion to make decisions and more frequently perform key boundary‐spanning roles (Bruneel and De Cock ; Holmlund and Kock ; Jones and Coviello ). Scholars have also highlighted that social networks are important not only in the pre‐entry phase, but also in the subsequent moments of international strategies, where they play different roles (Agndal, Chetty, and Wilson ; Chetty and Agndal ; Lindstrand, Melén, and Nordman ).…”

“…According to recent literature, however, our knowledge of the role of social networks on the internationalization of SMEs remains partial and fragmented (Bruneel and De Cock ; Ribau, Moreira, and Raposo ; Stoian, Rialp, and Dimitratos ) and further investigations—both theoretical and empirical—are required, with the ultimate aim of deriving useful implications for managers and policymakers (Galkina and Chetty ). Indeed, the benefits of social networks in the internationalization of SMEs are often “taken for granted” (Ellis ), while the actual role they play, as well as the dynamics that they generate, are not yet entirely clear.…”

“…Following previous scholars (Hilmersson and Jansson ; Hongxin and Chin‐Chun ; Ojala ), we define as interpersonal social networks both the informal links in the business settings and the personal relationships with acquaintances, friends, and relatives. In more detail, we try to contribute to filling the literature gap about the social dynamics that take form at the interpersonal level in traditional SMEs and that affect both the activities of exploration/exploitation of opportunities abroad, as well as the path and the performance of the internationalization processes in the pre‐entry and entry/post‐entry phases (Ahi et al ; Bruneel and de Cock ; Chetty, Karami, and Martín ). Then, we explore the following research questions: How do interpersonal social networks affect the internationalization processes of traditional SMEs in the pre‐entry and entry/post‐entry phases?…”

Southeast Asian market entry mode choice of Chinese firms under the Belt and Road Initiative

“…Transaction cost theory is the most frequently used theoretical perspective, followed by OLI and resource-based view [10]. Studies applying transaction cost theory have shown the importance of environmental uncertainty and asset specificity, and have found that: when the environmental uncertainty is high, firms are more likely to adopt non-equity entry modes [11]; firms with high asset specificity tend to prefer entry mode with high control [12]; firms will choose high-control entry mode when both of them are high [13].…”