Article ID: | iaor201113012 |
Volume: | 22 |
Issue: | 1 |
Start Page Number: | 4 |
End Page Number: | 20 |
Publication Date: | Mar 2011 |
Journal: | British Journal of Management |
Authors: | Prashantham Shameen |
Keywords: | exports, India, social capital |
‘Micromultinationals’ are small to medium‐sized enterprises (SMEs) that use higher‐commitment entry modes beyond exporting. The study extends the micromultinational notion by addressing the question: what enables some internationalizing SMEs to become micromultinationals rather than pure exporters? Adopting a connectionist and bonding perspective, its focus is on cross‐border coethnic ties as a valuable source of social capital. A survey of 102 Indian software SMEs indicates that higher stocks of cross‐border coethnic social capital facilitate the adoption of higher‐commitment entry modes by micromultinationals. Also, micromultinationals have a significantly higher degree of internationalization (the percentage of sales from foreign sources) than pure exporters.