Indirect Internationalization of New Ventures: A Development And Test of Two Theories

This paper develops resource dependency and institutional theory arguments for explaining SME involvement in direct and indirect (via intermediaries) export activity. Based on resource dependency theory, we argue that a desire to leverage resources in a favorable home market may explain SME direct and indirect export activity. Building on institutional theory, we argue that SMEs operating in an organization field that is perceived as becoming more international will be more likely to export, either directly or indirectly. The theory arguments are tested using a sample of 871 Dutch SMEs. Results from binomial and multinomial logit regressions indicate the following: firms in the production industry are most likely to use export intermediaries, as are firm that face favorable home-country access to investors and banks and favorable home-country government regulations for businesses. In line with institutional theory arguments, firms are most likely to export, directly or indirectly, when the organization field is characterized by domestic competitors and customers who increasingly operate abroad and by an increased use of foreign suppliers. Compared to the direct mode, firms pursuing indirect modes are more likely to perceive favorable national finance market access and less likely to perceive favorable national production costs.