A dynamic perspective to the internationalization of small-medium enterprises

Despite the fact that the dominant theories of the internationalization of small-medium enterprises (SMEs) prescribe a dynamic and evolutionary process for the firm, most of the empirical research on this topic has been based on in-depth studies of a few cases, or cross-sectional surveys, which cannot capture the dynamic nature of exporting decisions that occur over many years. In this study we propose an empirical framework for studying the internationalization of SMEs that: (a) identifies latent internationalization stages based on multiple indicators of the firms’ engagement and strategies in foreign markets over multiple years, and (b) analyses the firms’ movements among these latent states over time, as a function of main characteristics of the firms and their markets at each point in time.