Drivers of SME Internationalisation : Implications for firm growth and competitiveness

This study provides new empirical evidence on the degree and modes of internationalisation of European SMEs using internationally comparable data. It highlights the trends, determinants, and impacts of SME internationalisation while distinguishing between different internationalisation modes, such as exporting and outward FDI activities. In particular, it investigates the firm characteristics and key drivers that influence the internationalisation of SMEs. For instance, these firms’ export participation varies widely by firm size, industry affiliation, firm age, and destination market. Possible factors influencing the export decisions of SMEs include the initial level of labour productivity, innovation activities, foreign ownership, and geographical location, as well as home- and host-country factors (e.g. business climate conditions and export regulations). The empirical models used to investigate the determinants of the export status and export intensity consist of probit, two-part models and Heckman selection models. A set of policy recommendations is then developed based on the empirical results