Internationalization pathways among family-owned SMEs

Abstract

Purpose: The purpose of this paper is to increase understanding of the internationalization of family firms; to investigate how the framework by Bell et al. on the internationalization patterns of firms could explain the internationalization pathways taken by family-owned small to medium-sized enterprises (SMEs); and to identify typical patterns and features in the various pathways taken by family-owned SMEs.

Design/methodology/approach: This paper reports findings from an in-depth multiple case study with eight Finnish family-owned SMEs.

Findings: The ownership structure had the most important role in defining the internationalization pathways followed by the family-owned SMEs: a fragmented ownership structure led to traditional internationalization pathway whereas a concentrated ownership base led to born global or born-again global pathways.

Practical implications: Family entrepreneurs should carefully consider the division of ownership and seek to build new relationships in foreign markets, in addition to their primary co-operators.

Originality/value: The authors extend the integrative model of small firm internationalization by Bell et al. toward family-owned SMEs and highlight the most important dimensions in the different internationalization pathways of family SMEs. The ownership dimension is integrated within discussion on differing internationalization pathways. The authors utilize a family business specific perspective (the stewardship perspective), in order to understand the specific features of internationalization among family SMEs, and also how these features differ between family SMEs and other firms.