The Impact of Governance Mechanisms on SME Internationalization - Empirical Evidence from Medium-Sized Austrian Firms

Description

In pursuit of a competitive advantage, the internationalization of business activity has become a crucial strategy for many enterprises, including small and medium enterprises (SMEs). In this connection, corporate governance mechanisms can play a crucial role in shaping a firm's strategic objectives and outcomes, including its international activity. Therefore, based on a sample of medium-sized Austrian firms, this paper investigates the impact of various governance mechanisms on internationalization. The findings reveal that group affiliation and the existence of an advisory board are positively associated with internationalization. Furthermore, we found an inverted U-shaped relationship between family influence and internationalization. To facilitate internationalization, the SMEs analyzed in this paper do not make use of the pool of resources, which the managing directors may bring with them. In contrast, we found SMEs with management boards consisting of only one person to be more likely to be active internationally. In summary, our results suggest that group companies and advisory boards are the best means of equipping SMEs with the capabilities, know-how, contacts and resources, which are necessary to operate a business internationally.

Period	11 Jun 2012
Event title	57th International Council for Small Business (ICSB) World Conference 2012
Event type	Conference
Location	New ZealandShow on map