Social Capital and Indian Micromultinationals

Social Capital and Indian Micromultinationals

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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:
Keywords: exports, India, social capital
Abstract:

‘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.

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