Internationalisation of small to medium-sized manufacturing firms: a network approach

How do firms use business networks when they internationalise? To answer this question, a longitudinal case study of four manufacturing firms in a small open economy such as New Zealand is used. This paper includes a dynamic element in the study of internationalisation by using Johanson and Mattsson's (1988) model [Internationalization in industrial systems — a network approach. In P. J. Buckley, & P. N. Ghauri, The internationalization of the firm: a reader (pp. 303–321). London: Academic Press]. This model uses social exchange theory to illustrate how firms develop network relationships organically to internationalise. In New Zealand, however, government export promotion programmes encourage formal structured networks. This paper identifies the theoretical gap in the literature, which is the focus on organically developed networks rather than formal structured ones. The study's findings illustrate the dynamics of how firms interact with their network partners to extend, penetrate and integrate their international markets. Networks can help firms expose themselves to new opportunities, obtain knowledge, learn from experiences, and benefit from the synergistic effect of pooled resources. Another contribution of this paper is that it identifies weaknesses and various other factors that influence the model, thus advancing the literature.