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The Internationalization of Small and Medium-Sized Enterprises: A Policy Perspective

The Internationalization of Small and Medium-Sized Enterprises: A Policy Perspective Small and medium sized firms play an important role in the process of creative destruction. The focus of the paper is on the international diffusion of small and medium sized firms innovations. Small and medium sized firms face two challenges in globalization: property rights protection and barriers to entry. We suggest that these barriers can frequently be circumvented by using existing multinationals as international conduits for small and medium size firms' innovations. However, such intermediated modes of expansion is adversely affected by transaction difficulties and intermediator's rent extraction. We raise two categories of questions: (i) is the private sector systematically making the wrong choice between the direct and intermediated mode of international expansion? and (ii) What should be the policy guidelines to improve the overall rate of international diffusion of innovation by small and medium sized enterprises. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Small Business Economics Springer Journals

The Internationalization of Small and Medium-Sized Enterprises: A Policy Perspective

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References (51)

Publisher
Springer Journals
Copyright
Copyright © 1997 by Kluwer Academic Publishers
Subject
Business and Management; Management; Microeconomics; Entrepreneurship; Industrial Organization
ISSN
0921-898X
eISSN
1573-0913
DOI
10.1023/A:1007991428526
Publisher site
See Article on Publisher Site

Abstract

Small and medium sized firms play an important role in the process of creative destruction. The focus of the paper is on the international diffusion of small and medium sized firms innovations. Small and medium sized firms face two challenges in globalization: property rights protection and barriers to entry. We suggest that these barriers can frequently be circumvented by using existing multinationals as international conduits for small and medium size firms' innovations. However, such intermediated modes of expansion is adversely affected by transaction difficulties and intermediator's rent extraction. We raise two categories of questions: (i) is the private sector systematically making the wrong choice between the direct and intermediated mode of international expansion? and (ii) What should be the policy guidelines to improve the overall rate of international diffusion of innovation by small and medium sized enterprises.

Journal

Small Business Economics – Springer Journals

Published: Sep 29, 2004

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