Exploring the relationships between innovation and internationalization of small and medium‐sized enterprises: A nonrecursive structural equation model

Abstract

This article seeks to provide more insights on the two‐way link between internationalization and innovation by considering total, direct, and reciprocal effects using a nonrecursive structural model. Innovation is defined through product and process development, while internationalization is defined through inward and outward internationalization in both closer and farther markets. The results suggest that these two major sources of growth are linked by different sets of relations, from the investment in product and process innovation to outward internationalization in a closer market, or from inward and outward internationalization in farther markets to the investment in product innovation. Copyright © 2013 ASAC. Published by John Wiley & Sons, Ltd.

Dynamics of Innovation and Internationalization Among Small and Medium-Sized Enterprises in Viet Nam

“…However, only firms that are consistently exposed to export markets are able to overcome the innovation hurdle. And as Halilem et al (2014) put it, internationalization and innovation are linked by different sets of relations.…”

As capacidades dinâmicas para a inovação e os padrões de internacionalização de empresas de base tecnológica: um estudo de casos múltiplos com PMEs brasileiras

“…The product innovation is related positively to the internationalization process to nearby markets, as well as inward internationalization process are related to outward process. These conclusions reflect the SMEs' internationalization process, which often initiates from imports, to the acquisition of market knowledge and business networks that support outward internationalization processes (Halilem et al, 2014), such as export modes (Grandinetti & Mason, 2012).…”

“…Additionaly, there are the drivers for the internationalization process, such as innovation (Cerrato, 2009;Chetty & Stangl, 2010;Colovic, 2013;D'Angelo, 2012;Esteve-Pérez & Rodríguez, 2013;Gashi et al, 2014;Gerschewski et al, 2015;Guan & Ma, 2003;Halilem et al, 2014;Karadeniz & Goeçer, 2007;Kylaeheiko et al, 2011;Loefgren, 2014;Oxtorp & Elg, 2015;Pla-Barber & Alegre, 2007;Poblete & Amorós, 2013;Rammer & Schmiele, 2009;Rodríguez & Rodríguez, 2005;Sass, 2012), business networks (Ghauri et al, 2003;Johanson & Vahlne, 2009;Tambunan, 2009;Tang, 2011) and the manager's goals and global mindset (Andersson & Tell, 2009;Bloodgood, 2006;Blackburn, Hart, & Wainwright, 2013;Miocevic & Crnjak-Karanovic, 2012).…”

“…Firms, in order to avoid risks, generally start to internationalize through less complex operation modes, and inward operation modes constitute the first international organizational learning, mainly due to involve low risk commercial transactions. Furthermore, importing high-technological products enhances the product and the process innovations, as the products' technological functionalities are available to be incorporated by the firms (Halilem et al, 2014).…”

“…In this regard, Halilem et al (2014) argue that there is a great number of studies referred to the unidirectional possibilities, while the bi-directionality still lacks studies to investigate which determinants of the innovation development and the internationalization process positively enhance both processes. The bi-directional analysis presents important considerations about this relationship.…”