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Profitable SME internationalisation: the influence of cross-relational and relationship-specific network competence

Authors
Type
Published Article
Journal
International Journal of Procurement Management
Publisher
Inderscience Publishers
Publication Date
Jan 06, 2014
Volume
7
Identifiers
DOI: 10.1504/ijpm.2014.064972
Source
MyScienceWork
License
White

Abstract

Small- and medium-sized enterprises (SMEs) often internationalise to enhance their long-term survival and profitability. Their abilities to develop business network relationships with supply chain and other business partners have also been found to have a beneficial effect on their international success. However, the influence of such network competence on their long-term profitability has received less attention. The aim of this study is to do so, by examining how the network competence of SMEs influences their internationalisation propensity and subsequent profitability. Using a sample of 298 Finnish SMEs across five industries, the results indicate that relationship-specific network competence is associated with increased likelihood of first foreign market entry, whereas cross-relational network competence is positively related to increased profitability among internationalised SMEs. Thus, internationalising SMEs benefit from both types of network competence, but their importance depends on the phase of the internationalisation process and on the strategic goals of the firm.

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