Abstract
This study investigates the relevance of interorganizational networks for the international performance of small and medium‐sized enterprises (SMEs) in relation to the foreign market entry mode (FMEM) selected. We distinguish two groups of internationalized SMEs: exporting firms and micromultinational enterprises (mMNEs). Drawing on insights from the network theory, our study accounts for the role of intermediate outcomes (innovative behavior and foreign market knowledge). Structural equation modeling is conducted in a sample of U.K.‐based internationalized SMEs. Our findings suggest that interorganizational networks have an indirect influence on international performance but differences are found among the two groups of internationalized SMEs.
Introduction
Interorganizational networks play an important role in the internationalization of small and medium‐sized enterprises (SMEs) as acknowledged widely by the international business literature (Chetty and Blankenburg Holm 2000; Coviello 2006; Hilmersson and Jansson 2012; Loane and Bell 2006). However, the way interorganizational networks foster innovative behavior and foreign market knowledge development to affect international performance, as well as the possible effect of the foreign market entry mode (FMEM)1 selected by the SME, represent gaps in our knowledge that deserve to be further investigated. It may be that different market entry modes dictate dissimilar networking strategies, affecting innovative behavior and foreign market knowledge differently.