Internationalization and performance of small- and medium-sized enterprises

Abstract

In this paper, we examine the relationship between the degree of internationalization (DOI) and performance which represents a central issue in the international business literature. We argue that the substantial literature addressing this relationship is hampered by problematic measures for the key constructs (DOI and firm performance) and inconclusive results. Drawing from the internationalization process and location theories, we propose new measures for DOI (based on the dispersion of sales across geographic regions) and deploy a perceptual, multi-item measure of performance. Based on analyses of 94 survey responses provided by small- and medium-sized enterprises (SMEs) in Singapore, we find that that DOI positively impacts performance. © 2007 Elsevier Inc. All rights reserved.