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Internationalization and performance of Korean SMEs: the moderating role of competitive strategy

Jaeyoung Cho () and Jangwoo Lee ()
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Jaeyoung Cho: Kyungpook National University
Jangwoo Lee: Kyungpook National University

Asian Business & Management, 2018, vol. 17, issue 2, No 3, 140-166

Abstract: Abstract Drawing upon the liabilities of newness and smallness perspective, we explore the impact of the degree of internationalization (DOI) on the performance of small- and medium-sized enterprises (SMEs) and the moderating impact of competitive strategies. An analysis of data from Korean SMEs reveals an S-shaped relationship between DOI and performance. Moreover, SMEs emphasizing a differentiation strategy may have better performance when increasing the DOI, whereas the opposite is true for SMEs emphasizing a cost leadership strategy. The findings support a three-stage internationalization theory in the SME context and provide a contingency perspective on the performance implications of the optimal DOI.

Keywords: Degree of internationalization; Differentiation strategy; Cost leadership strategy; Liabilities of foreignness; Small- and medium-sized enterprises (SMEs); South Korea (search for similar items in EconPapers)
Date: 2018
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DOI: 10.1057/s41291-018-0036-8

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