Patterns of internationalisation of Finnish SMEs in Estonia: Preliminary survey results

Abstract

Objective: The objective of this paper is to look at the patterns of the internationalization process of Finnish SMEs and how it fits the internationalization models. Discussions are based on the interrelated theories of internationalization specifically the Uppsala model, Network approach and Models of International Entrepreneurship. This work also presents an intense analysis of the level of internationalization among SMEs, the mode of entry, motives and barriers for internationalization.

Research Design & Methods: The empirical research was carried out in the period of January 2018-August 2018. Data were collected through a mail survey questionnaire and 121 usable responses were received. The data was then analyzed in SPSS software by the cross-tabulation method to achieve the results.

Findings: Findings indicate that the majority of Finnish SMEs that started international operations follow a step-by-step approach of internationalization. Exporting was a major mode of entry into foreign markets, capturing market share was the main motive, and lack of market knowledge was a major barrier for internationalization.

Contribution & Value Added: It is confirmed that Uppsala, Network and Entrepreneurship models are still valid, and majority of Finnish SMEs follow the systematic internationalization process. This study contributes to the internationalization process of SMEs and calls for further comparative research in other markets to validate the results. It is confirmed that there is no single theory, which explains the internationalization process of SMEs and this work provides the threshold for theory development.

Keywords

exporting, internationalization theories, models of international entrepreneurship, network approach

Author Biography

Faisal Shahzad

Lecturer in the Department of Business Management and Business Development Manager at the Arcada University of Applied Sciences Helsinki Finland. He has been teaching international business and Strategic Management courses in the Estonian Business School, Metropolia UAS as a visiting faculty member. He has been working on different projects, which was funded by EU and non-EU bodies like Edu-SMEs, NOBANET, IGWL, Finnpartnership etc. His research interests include international business, market entry mode choice, internationalization of SMEs, entrepreneurship, global retail expansion and patterns of FDI.

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