This article develops a new 'sequential internationalization' theoretical framework to explain internationalization by small-and medium-sized enterprises (SMEs) from a dynamic emerging economy. Looking at 18 cases of Korean SMEs in China, it analyzes the changing map of the division of labor between parent firms in Korea and subsidiaries in China. We find that internationalization has been sequential, reflecting the higher resource constraints facing SMEs in comparison with large firms. SMEs tend to proceed from a product-based to a value chain-based division of labor, and finally to a market-based division of labor between the parent firm and its local subsidiaries.
Bibliographical noteFunding Information:
Earlier versions of this article were presented at a Workshop in Kyoto University in March 2012, and the International Conference APROS11 in Australia in December 2005. The second author acknowledges the useful comments by the referee and editors of this special issue, as well as the financial support of the World Class University (WCU) program through the National Research Foundation funded by the Ministry of Education, Science and Technology (R32-20055).
All Science Journal Classification (ASJC) codes
- Business and International Management
- Sociology and Political Science
- Political Science and International Relations
- Strategy and Management