Learning processes in the development of absorptive capacity of internationalizing SMEs

Although there has been a growing recognition of the importance of learning in the internationalization of firms in the international business literature, there have been few empirical studies, and these have been mainly quantitative. In order to secure deep understanding of learning processes of internationalizing firms the study in this chapter adopted a qualitative approach based on 12 longitudinal case studies of internationalizing firms. Data collection involved multiple, semi-structured interviews with chief executive officers conducted over three consecutive years. Secondary data and expert opinion provided both a means of validation and enrichment of the interview data. Internationalization process theory emphasizes the importance of experiential market knowledge in explaining the gradual internationalization of firms. International new venture research places more emphasis on knowledge intensity and unique product knowledge to explain the early and rapid internationalization of new firms. Based on a framework of absorptive capacity, the research provides new insights into the nature of knowledge used by internationalizing firms, clarifies distinctions between different types and sources of knowledge and examines the assimilation and exploitation of knowledge acquired by firms. Implications for management and policy-makers are discussed.