A review of current international business and international entrepreneurship research and its policy-making implications

The report aimed to provide a holistic review of the existing literature on international business (IB) and international entrepreneurship (IE). IB is defined as the study of firms which do business across national borders, and IE as focusing on opportunity-driven entrepreneurial ventures that are international oriented at or immediately after founding.

The methodology consisted of a review of the titles and abstracts of 2,480 research articles published between January 2009 and March 2013 in 15 influential (in terms of number of times cited) international management journals.

The review finds that exporting research primarily focuses on three areas: antecedents to export performance; export channel selection (the extent to which exporting firms assume responsibility for elements of distribution in foreign markets); and export performance evaluation. It suggests that firm size, R&D expenditure, advertising expenditure and business group affiliation can be important to a firm’s level of exporting activities, and that SMEs with greater size and R&D competence may perform better in the exports market. Aligning export channel choice with firm-level market orientation capabilities and institutional distance (i.e. differing regulatory, social and cultural influences) is highlighted as yielding better export performance, and a positive relationship between exporting and macroeconomic growth is also noted. The review indicates that policy-makers seeking to improve international competitiveness and economic development via exporting success should consider ways in which they can help firms with their marketing capabilities. Entry mode choice (the method used by firms to enter international markets) and SME exporting performance are found to be significantly related. The review suggests that being able to explore and exploit opportunities, and gain foreign market knowledge plays an important role in successful internationalisation, as well as the ability to develop and sustain networks. It notes that the existing literature frequently acknowledges that entrepreneurs are both constrained and enabled by their government’s policies. Two benefits for foreign entrants in emerging economies are identified: significant growth potential; and the firm’s new learning on how to tackle emerging economies may provide a strong growth engine for both emerging and developed economies. The review indicates that there is huge potential for Scotland to gain a share of China’s capital expansion abroad, as it is not one of China’s top 10 investment destinations yet.

The review highlights a number of implications for practitioners, including that support providers for SMEs have a role in helping firms to recognise learning needs, and should have staff available who have prior international experience and networks in the relevant sector.