ENHANCING FACTORS OF BUSINESS INTERNATIONALIZATION - A MODEL FOR PORTUGUESE SMES

Nowadays, firms need to engage in a continuous innovation process and constantly restructure their operations to meet not only the requirements of national but, above all, international competition. Failure to act internationally may lead to a loss of market opportunities and to a more severe inability to survive in the long run. Firms must find new ways to develop competitive advantages which entails searching for and acquiring new skills, resources and abilities. Knowledge is an important strategic resource due to its impact on firms’ competitive capacity.

Organizational knowledge, or its absence, was a central explanation for internationalization in original stage-based models (Uppsala School), but International New Ventures (INV) theory recognized that individual factors such as international experience can also influence the pace of internationalization. More specifically, some recent empirical evidence offers important insights into the internationalization of new business, showing that small and younger companies are able to compensate for their limited experiential learning through learning from previous individual experiences of the top management team (Congenital learning) and through inter-organizational relationships (vicarious learning). Vicarious Learning (learning from others) plays a central role in the early internationalization decision. Although some articles explicitly use the term "vicarious", many clearly indicate learning "from the observation of others" as a mechanism that influences the decision to start internationalization, either through imitation or working alongside others. In many instances, firms, including international new ventures, may access those resources, including the market–specific knowledge, through alternative ways of governance, such as “industrial networks”. In this work, through an empirical study with 320 Portuguese international firms, a Theoretical Model that measures the enhancing factors of business internationalization is presented, with evidence of the importance of Networks, of “Specific Skills of its workers”, “International Experience of its workers” and of “Entrepreneurial Propensity and to take risks from workers and top management team”.