Internationalization and Innovation: The Effects of a Strategy Mix on the Economic Performance of French SMEs

Abstract

A growing body of literature has studied innovation and internationalization as essential competitiveness strategies. Small and medium-sized enterprises (SMEs) can achieve growth by launching new products or reaching new customers. A mix of both of these strategies represents a challenging opportunity for businesses. Most studies explore export and research activities as joint explanatory variables. This article contributes to the literature by considering the joint dynamics of internationalization and innovation strategies and measuring the impact of this strategy mix on the financial performance of French SMEs. Both strategies consumehuman, technical, financial, commercial, and organizational resources. The antagonism and the complementarity of international development and innovation activities are explored in this paper. Based on a sample of 335 French SMEs, the results confirm a strong interdependence between technological appropriation in internationalized SMEs and their business growth. Indeed, structuring and engaging in research and development activities for exporting SMEs will contribute to an increase in activity volume. The results also indicate technological resources as a common driver of both innovation and internationalization activities. The combination of product development and geographical market expansion is the most valuable combined strategy that is positively related to research and development intensity.

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