Success Factors in SMEs' Internationalization Processes: An Italian Investigation

International Competitiveness of Small Firms Only recently has the theoretical debate on internationalization focused more deeply on the specific features of small firms in an attempt to establish a general theory (Julien 1994). The "classical" literature on the subject had an abstract, general firm model as its reference point and implicitly considered the large firm as its object of analysis. However, a series of studies has underlined that size is no restraint in the international competitiveness of small firms, both because of their important contribution to the trade balance of their respective countries (Hardy 1986; Beamish and Munro 1986) and because sales abroad have been shown to be unaffected by firm size (Cavusgil and Tamer 1980; Edmunds and Khoury 1986; Ali and Swiercz 1991; Julien, Joyal, and Deshaies 1994). Indeed, SME's export sales can also reach high levels (Calof 1993) because of the difficulties encountered on the domestic market that drive them to enter the international marketplace (Czinkota and Johnston 1983). Small firms, however, cannot enjoy all the options in the internationalization process outlined in the literature (Baird, Lyles, and Orris 1994; Stampacchia and De Chiara 1996). For example, small firms located in southern Italy are known to have a structural handicap in the form of limited financial resources. It is therefore unrealistic to expect them to follow an international development path based on direct foreign investment or to take other initiatives requiring substantial capital. (1) It has also been shown that under certain circumstances, an entrepreneurial culture resistant to change, an increasingly centralized behavior and other country-specific factors can hinder the international development of small firms (Calof and Viviers 1995; Caruana, Morris, and Vella 1998; Minguzzi and Passaro 1997, 2001). Consequently, among small firms located in southern Italy, export is still the most widespread form of internationalization. Role of Support Services Since the late 1970s, the role and significance of support services for the internationalization of small firms have been widely investigated in the literature (Czinkota and Tesar 1982; Valikangas and Lehtinen 1994). These approaches assume greater importance if the determinants of the demand for such services are analyzed in relation to the needs of small firms (De Noble, Castaldi, and Moliver 1989; Moini 1998) or in relation to their export performances and profitability (Sarder, Ghosh, and Rosa 1997; Weaver, Berkowitz, and Davies 1998; Hart and Tzokas 1999). A company's ability to develop know-how and sell their products on international markets is seriously jeopardized by diseconomies of scale when the degree of specialization of the skills cannot reach a certain threshold. The main obstacle to international activity often lies within the firm itself rather than outside it (in terms of market opportunities), as it has to do with internal resources and limited capacities (Wright 1993; Bijmolt and Zwart 19 94). Very often, small firms attempting to expand beyond their national market have no choice but to outsource a given service. Studies of supply services to SMEs based on analysis of primary and secondary benefits deserve mention. This literature has generated an interesting debate on the relationship between the secondary effects of support programs and SMEs export growth (Wood 1994, 1999; Chrisman and McMullan 1996). The implications drawn from these studies have contributed to the debate on service supply policy. Other studies have probed, instead, into the classification and typology of internationalization services (Bello and Williamson 1985). Buying support services can improve international competitiveness for SMEs. Country-specific factors can be exploited (comparative advantage) and distinctive competencies increased (competitive advantage) following an effect distribution which depends on the firm's learning capacity (De Chiara and Minguzzi 1996). …