28/02/2024

Top Business

Trend About Business

Innovation Capability Has a Positive Impact on International Expansion for Global SMEs

Innovation Capability Has a Positive Impact on International Expansion for Global SMEs

©iStock/liuzishan

According to the research paper, “Pace of innovation and speed of small and medium-sized enterprise international expansion, there is compelling evidence that innovation capability has a positive impact on the international expansion of SMEs.

Unsurprisingly, the relevant literature displays an increasing interest in SME innovation activities and how they influence a firm’s international activities. Hitherto, research has focused on the earliness of entry into a foreign market. For example, the literature on born globals argues that SMEs with innovative products internationalize soon after their inception to benefit from opportunities emerging before competitors enter the same markets.

The authors go on to say that SMEs with a greater propensity to innovate by introducing new products and processes tend to internationalize in a wider range of foreign markets. This extensive internationalization in turn, allows these firms to gain new insights from diverse foreign markets, in turn improving their technological learning and innovation capabilities.

Read the entire research paper:  “Pace of innovation and speed of small and medium-sized enterprise international expansion.”