THEORETICAL FOUNDATIONS OF INTERNATIONALIZATION SMALL AND MEDIUM BUSINESS IN THE CONTEXT OF GLOBALIZATION

Author
, associate professor, Kharkiv, Pushinska, 77
, associate professor, Kharkiv, Pushinska, 77

In heading

 Economic theory;

Signed print

 21.10.2016

Issues number

 2016 - № 3 (26)

Page

 69-82

Type of articles

 Scientific article

Code UDK

 339.94

ISSN print

 2411-5584

Abstract

 Problem setting. Change of the correlation and role of various production factors in economic development indicates about a new phase of socialization of production, which associated with the gradual loss of competitive advantages of mass production, changing of position and character connections of large, medium and small businesses, supply chain development and value creation. In the context of globalization, amplification the degree of internationalization of small and medium enterprises is a natural and irreversible process that deserves research.
Recent research and publications analysis. The theoretical basis of internationalization were laid in the works of R. Vernon, M. Porter, S. Andersson, J. Dunning, J. Johanson, J. Mathews, P. McDougall, B. Oviatt, F. Root, J. Vahlne, O. Williamson etc. Theories of internationalization disclosed and classified, analyzed the advantages and factors, forms of penetration and presence on foreign markets in scientific research of domestic scientists (J. Vdovychenko, Mr. Ilchuk, Yuri Orlov, I. Sytnik, A. Weaver, Du Chunbu etc.). At the same time, the internationalization of SMBs has received less attention.
Paper objective. The article’s purpose is to reveal features of the socio-economic nature of SMBs that create competitive advantages in the context of globalization, to analyze the preconditions and barriers to the internationalization of SMBs, to explore contemporary theories of internationalisation regarding their use of SMBs.
Paper main body. SMBs in the context of globalization are becoming an important sector of the national economy, which has important innovation-production and export potential. Strengthening the position of SMBs is a consequence of the weakening actions of the effect of scale, changes in the strategies of development of the big business and realization of programs of state support of SMBs. The objective prerequisites for the intensification of the processes of entering SMBs to foreign markets are: activation the processes of globalization, liberalization and international integration; development of technology and telecommunications; development of cooperation between TNCs and small businesses; internationalization of Service Industries; the unfavourable situation on the national market; government policies to stimulate foreign economic activity of SMBs. Subjective motives of internationalization include motives of increase firms (expanding markets and gaining access to new groups of consumers, attempts to use the economies scale, gaining access to cheaper resources, strengthen market position, etc.); a need or, conversely, the presence of intangible assets; industrial and social network motifs.
Conclusions of the research. Internationalization of SMEs is associated with many barriers and requires additional costs. However, market flexibility, dynamism, adaptability, deep specialization, mobility and innovative ability of small businesses create in the context of globalization the competitive advantages that allow to overcome obstacles and to develop their activities in foreign markets.
Theories of internationalization, which analyzing spectrum of strategic alternatives for the international development of companies, are widely used by TNCs, however, do not always correspond to the realities of SMBs. The most actual for the MSBs is the network approach to research internationalization, in particular, the concept of «born globals» (especially for high-tech small enterprises) and theory LLL (Linkage – Leverage – Learning), that studies the problems of internationalization of enterprises, whose activity is characterized by a later release into foreign markets, but their home countries are developing countries.
Short Abstract for an article
Аbstract. Features of the socio-economic nature of small and medium business, that strengthens its position on the world market in the context of globalization is disclosed in the article. The author has analyzed the objective and subjective conditions as well as obstacles to the internationalization of SMBs. The author has summarized the modern theories of internationalization and has analyzed the possibilities of their uses to SMBs.

Keywords

 Іnternationalization, small and medium business, the prerequisites of internationalization, theories of internationalization.

Reviewer

External reviewer

Article in PDF

 3 69-82

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08.09.2016