Internationalization of SMEs: Towards a model of internationalization capacity

Martin Havn & Henrik Juell-Sundbye

Student thesis: Master thesis


This thesis identifies a research gap in the literature on small and medium-sized enterprise (SME) internationalization, which currently lacks an integrated approach. Within this research field, there are multiple strands of literature that focus on drivers of the internationalization process of SMEs. In the literature review, a shared assumption related to organizational learning and capabilities emerge, concepts that are covered by the concept of absorptive capacity. Using absorptive capacity as the central element, this thesis constructs a model that includes prior knowledge, absorptive capacity, networks, and entrepreneurship, as they are identified as the most important organizational capabilities in the internationalization process of SMEs. The model depicts an SME’s internationalization capacity, which is the aggregate of prior knowledge, networks, and entrepreneurship to absorptive capacity. To further develop the model, this thesis conducts a multiple-case study of a sample of 14 Danish SMEs to learn about their internationalization process. Their accounts are interpreted and analyzed through propositions based on the model of internationalization capacity. The analysis shows that there are mutual dependencies between the organizational capabilities, and that the internationalization processes of the SMEs are dynamic processes, where focusing on the contribution of components in isolation becomes less valuable. The descriptive model is found to not sufficiently reflect the dynamics of mutual dependencies between the organizational capabilities, and is revised to better reflect these dynamics. It is adapted to be an analytical framework, and the key analytical dimensions identified in the analysis are added. Instead of placing absorptive capacity as the central element of the model, it becomes a model component on the same level as networks and entrepreneurship, while prior knowledge is removed. The analytical framework depicts the mutually reinforcing effects of the model components, and can be used by both researchers and practitioners as a vantage point for analysis of internationalizing SMEs.

EducationsMSc in International Business, (Graduate Programme) Final Thesis
Publication date2012
Number of pages105