The Influence of the Management Team's International Experience on the Internationalization Behaviors of SMES

Human capital and SME internationalization: a structural equation modeling study

“…Research has tried to determine a fi rm's internationalization by examining the evolution, structure, and processes of relationships among the fi rm's demographic, strategic, market, organizational, product, and attitudinal characteristics of internationalization (Forsgren, 1989;Johanson & Vahlne, 1977;Zagorsek & Marc, 2005). Following others (Daily et al, 2000;Manolova et al, 2002;Reuber & Fischer, 1997;Sullivan, 1994), a combination of existing and developed measures to capture the multidimensionality of internationalization were used. The dimensions of internationalization, operation mode, market, time, product, and degree were measured with Likert and binary scales.…”

“…Research into the internationalization of small and medium-sized enterprises (SMEs) has emphasized the role of entrepreneur-related elements that impact export performance, such as: strategy (Baird, Lyles, & Orris, 1994;Tyebjee, 1994); attitudes (Bijmolt & Zwart, 1994;Ogbuehi & Longfellow, 1994); commitment (Dhanaraj & Beamish, 2003); perceptions (Jaffe & Pasternak, 1994); orientations (Dichtl et al, 1984); the international experience of managers (Qian, 2002;Reuber & Fischer, 1997); as well as more integrative human capital elements (Andersson, 2000;Bilkey & Tesar, 1977;Cavusgil, 1993;Herrmann & Datta, 2002;Manolova, Brush, Edelman, & Greene, 2002;McAuley, 1999;Moini, 1995;Trevino & Grosse, 2002). Our study extends this literature in analyzing several dimensions of the human capital of a fi rm's chief entrepreneur with respect to their relative importance and infl uence on an SME's internationalization.…”

“…According to "upper echelon theory" (Hambrick & Mason, 1984), organizational outcomes, including strategic choices and performance levels, are partially predicted by managerial background characteristics. Other authors have expanded this theory to international contexts focusing on international orientation and international experience (Athanassiou & Nigh, 2002;Reuber & Fischer, 1997;Sambharya, 1996;Vida, Reardon, & Fairhurst, 2000), international assignment (Carpenter, Sanders, & Gregersen, 2000), and the heterogeneity of TMTs (education and tenure) (Carpenter, 2002;Carpenter, Geletkanycz, Sanders, 2004).…”

“…Manolova et al (2002) identifi ed personal factors as a common theme in their research on the internationalization of small fi rms, but no studies give much attention to the relative importance of the various dimensions of human capital embodied in the entrepreneur as they relate to the internationalization of SMEs. Premised on other studies that have analyzed different elements of human capital as they separately relate to SME internationalization (Bloodgood, Sapienza, & Almeida, 1996;Dichtl, Koeglmayr, & Mueller, 1990;Manolova et al, 2002;Reuber & Fischer, 1997Westhead, Wright, & Ucbasaran, 2001), we expect the four following dimensions of human capital of an SME's entrepreneur(s) to relate positively to its internationalization: international business skills, international orientation, perception of environmental risk, and management know-how.…”

“…International business skills acquired through experience in foreign markets, especially through involvement in multinational corporations or international organizations, exposes entrepreneurs to information and contacts in foreign markets. Moreover, knowledge of foreign markets enhances the likelihood of export engagement end expansion (Reid, 1983), increases the propensity to use investment entry modes with full ownership (full control entry modes) (Herrmann & Datta, 2002), and has a positive impact on the degree of internationalization (Reuber & Fischer, 1997). Knowledge obtained in international assignments is likely to bring a deeper understanding of international trade policies, exchange rate risks, an appreciation for other national cultures, and an international network of professional colleagues outside the fi rm, all of which will yield skills and capabilities with broad international applicability (Carpenter et al, 2000).…”