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Both business networks and institutional forces are relevant to firm internationalization but they have seldom been studied together. We investigate under what circumstances firms are more likely to adopt non-predictive strategy in light of the influence of the business networks, the institutional forces, and the home market background affecting their internationalization. Based on survey data from 758 small and medium-sized enterprises (SMEs) from Brazil, China, Poland, Italy, and Sweden, our results support the effects of formal institutional distance and cultural differences on the use of non-predictive strategies by SMEs in internationalization decisions, as well as the contingency effects of business network stability and of having an emerging market background. We integrate research on the liability of foreignness and the liability of outsidership and find that business network stability is critical. It does not moderate the relation between cultural difference and NPS adoption but attenuates the negative relation between institutional distance and NPS adoption, indicating that the liabilities of foreignness and outsidership play different roles in internationalization. © 2021 The Author(s)

This paper seeks to establish the effects that home country institutions may have on the internationalization of small and medium-sized enterprises (SMEs) as it progresses guided by non-predictive strategy, a decision-making approach that focuses on what can be done with the resources at hand instead of spending efforts on goals and plans. Such effects are missing in extant literature comparing SME internationalization with entrepreneurship efforts and are particularly problematic for SMEs, which rely heavily on home government support to internationalize and own few physical assets abroad. We compile our hypotheses in a structural model tested on a sample of 851 SMEs split between selected emerging and developed countries. Our results show that these groups of firms seem to differ in how effectively they can use internationalization knowledge, but no such differences seem to affect the use of upstream value chain knowledge. Downstream value chain knowledge seems to be the least relevant knowledge type. Our study highlights the need to account for home-country effects in SME internationalization and adds to a knowledge-based view of this process.

This study investigates the performance implications of the distinct mechanisms represented by business and social networks in the effectual internationalization. Our hypotheses consider the influence of both network types on firms’ decision-making during internationalization, including the use of effectuation’s overarching principle of non-predictive strategy and the analysis of affordable losses as preferred criterion for selecting between action paths. We test our structural model on a sample of 469 SMEs from Brazil, China, and Poland. The analysis demonstrates that the knowledge circulating in the firms’ business networks negatively moderates the relationship between non-predictive strategy and affordable losses, while social networking mediates the relationships between both non-predictive strategy and affordable losses, on the one hand, and international performance, on the other.

While the relevance of non-predictive strategies for the international expansion of small and medium-sized enterprises (SMEs) has been increasingly discussed, available studies tend to ignore the possibility of synergistic effects between predictive and non-predictive approaches in such a context. This paper contrasts the effects of both strategies on SMEs’ international market performance, considering that their combination can make room for synergistic effects. The analysis combines primary survey data from 851 SMEs in Brazil, China, Italy, Poland, and Sweden with secondary data retrieved from the World Bank. Besides supporting both independent and synergistic performance effects of predictive and non-predictive strategies, the results indicate that foreign market institutions affect each of these effects differently and suggest firm size effects worth consideration. Contributions include the test of the consensus that has been formed around the superiority of non-predictive strategies and the contextualization of SMEs’ decision-making strategies in both external and internal organizational terms.

Purpose: The authors seek to advance the understanding of small- and medium-sized enterprise (SME) internationalization at the regional level and examine the role of home market institutions in this process. Design/methodology/approach: The authors analyze hypotheses with data from SMEs in five country markets and from the Global Entrepreneurship Monitor. A cluster analysis establishes the regional diversification patterns (based on regional diversification scope, speed and rhythm) and a multinomial regression tests the effect of home market institutions on their adoption. Findings: The results offer a refined picture of SME regional diversification by revealing three patterns: intra-regionally focused firms, late inter-region diversifiers and early inter-region diversifiers. They also suggest that the adoption of these patterns is determined by SMEs' home market institutions. Originality/value: The authors develop a nuanced understanding of SME internationalization by building upon and expanding the regionalization rationale in the internationalization patterns literature. Additionally, the authors address the acknowledged, yet rarely investigated, country-level determinants of internationalization patterns. © 2023, Emerald Publishing Limited.