small and medium-sized enterprises’ (sme) internationalisation

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The aim of the study is to investigate the effects of proactive and reactive motivators on UK Small and medium-sized firm’s choice to internationalise regionally, and on their degree of internationalisation. Within the field of international business, studies on small and medium enterprises (SMEs) and mode of entry have found that SMEs have tended to internationalise and select their mode of entry mostly in a reactive manner and following cautious and incremental commitment routes. In time, with the advent of economic globalization and the change in the global regulatory environment SMEs’ attitudes towards internationalisation have changed with more and more firms challenging the traditional incremental and gradual model of internationalisation.

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  • The aim of the study is to investigate the effects of proactive and re-active motivators on UK Small and medium-sized firms choice to in-ternationalise regionally, and on their degree of internationalisation. Within the field of international business, studies on small and medi-um enterprises (SMEs) and mode of entry have found that SMEs have tended to internationalise and select their mode of entry mostly in a reactive manner and following cautious and incremental commit-ment routes. In time, with the advent of economic globalization and the change in the global regulatory environment SMEs attitudes to-wards internationalisation have changed with more and more firms challenging the traditional incremental and gradual model of inter-nationalisation. The study presents 7 hypotheses to test the concep-tual framework that different motivators can be split into reactive and proactive and that this has a clear effect on the choice of internation-alisation and entry mode, the degree of internationalisation and the degree of regionalization (focusing on UK manufacturing SMEs and their motivations in the EU). Data is collected from 103 UK SMEs and a correlation and multiple regression is run showing the impact and differences of such motivators. Findings prove proactive and reactive motivators can be separated into groups according to their effect and are distinct in themselves whilst also showing which motivators im-pact the most on regionalization, specific entry mode selection (par-ticularly exporting), and the degree of internationalization. In addi-tion, it is found that government policy can be a clear obstacle or push to internationalization.

    Vatatzi 55 str., 114 73 Athens, Greece EL. : +30210 6431108

    E-MAIL: ekdoseis.ocelotos@gmail.comwww. ocelotos. gr

    Dr. Stouraitis is a multi-lingual inter-national business researcher special-izing in small and medium enterpris-es and internationalization. He holds a Bsc in pure economics, an MBA an Msc in development administration and a PhD in international business strategy from prominent UK univer-sities such as the universities of Kent and Reading (Henley Business School) and University College London. He has worked and trained for the United Nations (FAO and IFAD) and European Commission (DG Enterprise) along his career. His research interests lie in in-ternational development, internation-al business, Small and medium sized enterprises, management and EU business policy. Born in Rome, Italy, and holding a dual nationality (Greek and Italian), he speaks five languages amongst which French and Spanish, is an extensive traveller and admirer of international cultures.

    Small and m

    edium-sized enterprises (SM

    E) internationalisation: A U

    K case study on the im

    pact of motivation on the degree of internationalisation

    Dr. VASSILIOS STOURAITIS

    ISBN 978-960-564-243-3

    140 210 SPINE: 16.3 FLAPS: 80

    0_cover_2_stouraitis.indd 1 3/4/2015 4:07:08 PM

  • Dr. VASSILIOS STOURAITIS

    Small and medium-sized enterprises (SME) internationalisation: A UK case study on the impact of motivation on

    the degree of internationalisation

    0_soma_stouraitis1.indd 1 3/4/2015 4:05:00 PM

  • Thesis submitted to the University of Reading to the degree of Doctor of Philosophy (PhD)

    Title Small and medium-sized enterprises (SME) internationalisation: A UK case study on the impact of motivation on the degree of internationalisation

    Author Dr. Vassilios Stouraitis Publishers sieries Science Book design Ocelotos Publications Copyright 2015 Dr. Vassilios Stouraitis First Published Athens, February 2015 ISBN 978-960-564-243-3

    Vatatzi 55 str., 114 73 Athens EL. : +30210 6431108E-MAIL: ekdoseis.ocelotos@gmail.com

    www. ocelotos. gr

    This publication is in copyright. Subject to statutory exception and to the provisions of relevant col-lective licensing agreements, no reproduction of any part may take place without the written permis-sion of the author and of Ocelotos Publications.

    0_soma_stouraitis1.indd 2 3/4/2015 4:05:01 PM

  • 5

    Acknowledgements

    It is a pleasure to thank the many people who made this thesis pos-sible.

    It is difficult to overstate my gratitude to my supervisors, Prof. Robert Pearce and Prof. Alan Rugman. With their inspiration, and their great efforts to guide me in the correct direction they made this work pos-sible. Throughout my thesis-writing period, they provided encour-agement, sound advice, useful teaching, and many useful ideas.

    I would also like to thank the staff at Henley Business School and the Graduate School for the Social Sciences (GSSS) for providing a great environment to work in, a stable and large office space, social events, the necessary programs and software, and for being always ready to answer any questions.

    I would also like to particularly thank my close colleagues for being open to discussion, for exchanging ideas, for being open to brain-storming and collaborating with each other. Their support and help has been critical in order to climb the mountain called doctoral re-search. Many good friendships have been born from this process.

    Furthermore, I would like to thank my close friends for standing by me throughout this long and tough journey on the way to making this thesis. I would like to thank them for also being there during my long data collection days all the way to my final conclusion days. Their moral support was a priceless moral boost and not to be forgotten.

    Last, but certainly, not least, I would like to thank my parents, Mr and Mrs. Stouraitis, for their immeasurable moral support throughout the beginning, the middle, and the end of this journey. Their patience, guidance, understanding and support created the foundations on which this journey was created.

    0_soma_stouraitis1.indd 5 3/4/2015 4:05:01 PM

  • 7

    Abstract

    The aim of the study is to investigate the effects of proactive and reactive motivators on UK Small and medium-sized firms choice to internationalise regionally, and on their degree of internationalisa-tion. Within the field of international business, studies on small and medium enterprises (SMEs) and mode of entry have found that SMEs have tended to internationalise and select their mode of entry mostly in a reactive manner and following cautious and incremental com-mitment routes. In time, with the advent of economic globalization and the change in the global regulatory environment SMEs attitudes towards internationalisation have changed with more and more firms challenging the traditional incremental and gradual model of internationalisation. The study presents 7 hypotheses to test the con-ceptual framework that different motivators can be split into reactive and proactive and that this has a clear effect on the choice of inter-nationalisation and entry mode, the degree of internationalisation and the degree of regionalization (focusing on UK manufacturing SMEs and their motivations in the EU). Data is collected from 103 UK SMEs and a correlation and multiple regression is run showing the impact and differences of such motivators. Findings prove proactive and reactive motivators can be separated into groups according to their effect and are distinct in themselves whilst also showing which motivators impact the most on regionalization, specific entry mode selection (particularly exporting), and the degree of internationaliza-tion. In addition, it is found that government policy can be a clear obstacle or push to internationalization.

    0_soma_stouraitis1.indd 7 3/4/2015 4:05:01 PM

  • 9Contents

    Contents

    List of figures ................................................................................................................14

    Chapter 1 Introduction .................................................................................................................171.1 Introduction/purpose of the research .......................................................17

    1.1.1 International mode of entry ...............................................................181.1.2 SME entry mode choice .......................................................................231.1.3 SME Internationalization .....................................................................241.1.4 The studys contribution to the research .......................................28

    1.2 Motivations of the study .................................................................................311.2.1 Research questions presented ..........................................................37

    1.3 Proactive and Reactive Motivators explained .........................................381.4 Purpose of the study ........................................................................................401.5 Anticipated contributions of the study .....................................................411.6 Organization of the study ...............................................................................42

    Chapter 2Literature review and gaps .....................................................................................442.1 Literature review on SME mode of entry choice and stimuli .............46

    2.1.1 SME entry modes literature review and analysis ........................472.2 The significance of SME internationalization and the SME definition

    adopted .................................................................................................................53The studys SME definition adopted/introduction to SMEs ........................532.2.1 The motives for SME internationalization ...............................................542.3 Empirical studies on SME Internationalization .......................................59

    2.3.

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