Small firms' internationalization for development in Tanzania

Abstract

The paper attempts to explore the role of networks in small firms' internationalization in Tanzania. It notes that while firm internationalization has been studied extensively, inquiry into how small firms enter foreign markets and the strategies they use has not received much attention. The study is further motivated by the fact that export performance of developing countries is alarmingly low, and hence there is need for African governments to create an environment that will stimulate small firms' competitiveness in the current globalized export markets if the millennium development goals are to be attained. This requires capacity building of the actors in order to take advantage of the benefits of the market access strategies under the global partnership for development. One such approach is to promote partnering and networks. The Tanzanian exploratory study has revealed that networks eliminate small firms ownership disadvantages and their perceived psychic distance, thereby facilitating their entry into foreign markets.

The Effects of the Degree of Internationalization on Export Performance: A Research on Exporters in Turkey

“…The examination of the degree of internationalization in this context also supports the holistic approach of the company to address its import-export activities (Fletcher, 2001). Furthermore, when the degree of internationalization is addressed with the abovementioned three dimensions, it would interact with the elements that has an effect on internationalization success (Ghauri et al, 2003) such as entering the marketplace based on the domain of the industry (Rutashobya and Jaensson, 2004;Smolarski and Wilner, 2005;Jansson and Sandberg, 2008), increasing the performance by becoming an investor in the foreign market (Lu and Beamish, 2001) and transferring the knowledge created into the product as a resource (Jacobs et al, 1997).…”

“…The internationalization process, which is a significant contributor to the economic growth of the developing countries (Rutashobya and Jaensson, 2004), is conceptualized as the dissemination of the corporate activities outside the national borders (Erkutlu and Yiğit, 2001: 149) and mainly involves export activities as a start (Cavusgil and Nevin, 1981). However, it should go beyond this phase (Jones, 2001) and should adapt the transformation from a conventional structure to dynamic feasibility structure (Knudsen and Matsen, 2002).…”

Current Trends in the International Business Environment

“…As argued by Sharma and Johanson (119) the international market entry is primarily dependent on a network position rather than other host market conditions such as economic or cultural conditions and they suggest that in the network approach, the firm's established relationships are part of a network for accessing resources which assists them in gaining new information at the right time. The relationships within the networks which function as bridges to unknown markets for firms emphasises social relationships as extremely important in internationalisation (12,13,45,61,64,69,71,119). A number of existing empirical studies show that international market selection and foreign market entry are strongly influenced by existing client relations and business contacts (56).…”

The Importance of Locally Embedded Personal Relationships for SME Internationalisation Processes From Opportunity Recognition to Company Growth

“…Interpersonal rela#onships, also known as individual networks or social networks are known to bring benefits within the interna#onalisa#on process in the form of reducing transac#on and informa#on-acquisi#on costs (Peng, Lee and Wang, 2005) (Rutashobya and Jaensson, 2004), risk (Sharma and Blomstermo, 2003) as well as uncertainty (Zain and Ng, 2006) during foreign market entry. They also provide knowledge of new markets (Harris and Wheeler, 2005) and help to develop resources and capabili#es needed for interna#onalisa#on (Zhu, Hi& and Tihanyi, 2006;Manolova et al, 2010;Chandra et al, 2009).…”