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Resource Based Internationalization from Small Developing Countries: Towards a Phase Model of Internationalization
Abstract
Small developing countries, in contrast to their developed counterparts, are characterized by a narrow resource base, (relatively) weak institutions, and a high degree of openness. For organizations from these states, internationalization is an imperative rather than a choice due to the small home market. However, they face severe resource constraints. When compared to developed countries, the level of formal support is relatively low, and firms need to build capabilities under resource constrained conditions. Further, as open economies, firms face intense competition from imports. Internationalization has largely remained unexplored in firms from these countries. Therefore, the objective of this chapter is to build a framework to explain internationalization of SMEs from small states. First, the various modes of international activity are discussed along with market entry strategies. The historical development of internationalization theory is then examined, identifying the major research paradigms and their underlying theoretical basis. Applicable theories are then assessed using an epistemological framework. The resulting research gap of resource development during internationalization was then examined using case studies of firms from a small state, Trinidad and Tobago.
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