Transformations in
Business & Economics
- © Vilnius University, 2002-2007
- © Brno University of Technology, 2002-2007
- © University of Latvia, 2002-2007
Article
Social Capital and SME Internationalization: An Empirical Examination
Mitja Ruzzier, Bostjan Antoncic
ABSTRACT. This study uses a structural equation modeling technique to predict the degree of internationalization of small and medium-sized enterprises (SMEs) based on the entrepreneur’s network structure as one of the most important features of social capital. Two dimensions of the entrepreneur’s network structure are developed and examined: strong and weak ties. The findings indicate that both strong and weak ties tend to have a positive influence on the internationalization of SMEs. While strong ties turn out to be positively and significantly related to internationalization, no empirical evidence was found to support the positive impact of entrepreneurs’ weak ties on internationalization for the whole sample of companies in the model. Some ties matter more than others; these findings challenge the empirical literature which usually groups different structures of networks together.
KEYWORDS: social capital, networks, internationalization, SMEs, Slovenia.
JEL classification: F23, Z13, P2.