The Effect of SME Internationalization Motivators on Initial and Successive International market Entry Mode Choice

The paper investigates the international expansion of small and medium-sized enterprises (SMEs) taking a sample of United Kingdom (UK) manufacturing SMEs. It focuses on the critical first and less risky step towards internationalization and separates the motivators in Home country and Host country. Using correlation and regression analysis it investigates 44 specific high impact pre-selected internationalization motivators from the literature and tests their effect on the firm’s initial entry mode decision and latest entry mode decision. Contrasting the Uppsala and Resource-based view perspectives (using a sample of UK independent manufacturing SMEs and utilizing a survey, correlation analysis and binomial logistic regression analysis), the paper finds and describes the effect of the most recurrent motivators from the literature on the SMEs’ first and latest decision to internationalize. The literature and empirical work on the topic has been fragmented and conflicting focusing on specific motivators but not necessarily justifying the selection or origin of variables even less on SMEs or taking into account regionalization. Results show that first entry mode choice affects subsequent entry mode choices and both are mostly affected by home country-specific, internal, motivators as opposed to host country-specific reactive motivators. The paper presents significant results for policy and management regarding SME internationalization and promotion of international activity.