The research highlights the seriousness of the barriers to entry and property rights risks encountered by SMEs in their striving to become international. Policy implications for the internationalization of small and medium-sized business forms are provided. …
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The study of international businesses and internationalization has been traditionally focused on the analysis of large corporations. Despite the growing importance of small and medium businesses, they often remain beyond the scope of scholarly studies. Apart from the fact that small and medium enterprises play a crucial role in the rapid advancement of economies, the prevailing majority of today’s international and multinational corporations have once been small and medium domestic enterprises. These are just some of the many reasons why the place of small and medium businesses in international trade should not be disregarded. More important is the question of risks faced by SMEs as they enter international trade. Recent advancements in technologies and transportation facilitate the subsequent integration of small and medium business forms into international trade communities. Therefore, SMEs should be aware of and be prepared to face international trade risks.
Small and medium enterprises: Why so neglected?
Small and medium enterprises are generally considered to create a strong foundation for the rapid advancement of economies. It is not surprising that so many developing countries provide SMEs with greater flexibility and freedom from taxation and administration burdens, to speed up their development and contribution to nations’ economic development. However, the current state of research often leaves small and medium-sized enterprises beyond the scope of analysis....
Yet, it should be remembered that “many MNEs developed from large, mature, domestic firms, and they commanded attention because they wielded significant economic power, especially after World War II” (Chandler 1986; Dunning 1981; Oviatt & McDougall 1994, p.45). Moreover, recent changes in the technological environment and transportation make it easier for domestic small and medium firms to expand to an international level. The growing number of consumers in international business makes international trade extremely attractive for domestic businesses, especially small and medium ones. Today, any small or medium businessman with a sufficient amount of capital can successfully conduct business anywhere in the world or travel to any part of the world, looking for international business opportunities (Oviatt & McDougall 1994). That small and medium enterprises find it easier to capture international business opportunities means the topic of their internationalization is becoming more urgent. Scholars in organization science are becoming more attentive to the issues of internationalization and international trade challenges affecting domestic SMEs. However, again, the most common issues considered in today’s research include the effects of public policies on SMEs, the nature and characteristics of entrepreneurial activities across countries, and comparing international and domestic enterprises (Oviatt, & McDougall 1994; Ohe et al. 1991). In light of these issues, a close look at the risks faced by domestic SMEs going into international trade is required. This report will help small and medium businesses going into the international trade
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(Small and Medium Sized Enterprises and the Risks They Face in an Essay)
“Small and Medium Sized Enterprises and the Risks They Face in an Essay”, n.d. https://studentshare.org/macro-microeconomics/1397789-small-and-medium-sized-enterprises-and-the-risks.
However, the common perception about SMEs suggests that such firms involve less than 500 employees. It has been identified that SMEs in EU countries generally operate with less than 250 employees. SMEs are the prime indicators for the job creation and income generation opportunities for the economies of the world.
This research paper addresses the importance of small business in the international contexts, mainly in relation to their roles in job creation, innovation and long term growth. This paper chooses UK as an example for how efficiently that small businesses play its roles and affect the economy of the country.
SME access to formal finance is an attractive possibility; and they have become competitive in domestic and international markets, and are more likely to grow further in future. The Small-Scale sectors add adequately to other aspects of socio-economic activities like reduction in inequalities of income, product diversification, isolated expansion of small scale industries, and relation with the other sectors of economy.
However, latest evidence advises that internationally active SME small and medium enterprises (characterized here as companies with 500 or less workers, the delineation is broadly utilized in industrialized countries) emerge in large figures and the production of an significant task of this customary considering (eg, OECD, 1997; Rennie, 1993; Rose and Quintanilla, 1996).
It is a business whose head count, or turn over falls below certain specified limits. The profits made by a SME are quite low, but due to the large number of SMEs in the market, the overall contribution of a small scale business to the over all GDP is quite significant.
According to the report the foregoing represents a daunting challenge, in that these areas contain psychological as well as motivational facets, in addition to the organizational precepts. The cross-organizational implications, impacts, effects and influences are both subtle as well as profound, with the more successful enterprises employing both facets to maximise their success.
However, globalization also raises the risk of marginalization of countries, in particular the poorest countries, and the most vulnerable groups everywhere"2
"Several CEI countries, which are moving towards a free market economy, fear, that the globalization process of the world economy and markets might affect an economic texture that is still unprepared from a technical, financial, organizational and social point of view.
SME either Small or the Medium-Sized Enterprises generally serves as the whole Switzerland, by providing the full range of various services and products from the fixed-line and also from the mobile communications to data service, internet, maintenance as well as the operation of the whole IT infrastructure.