• ISSN: 2010-023X
    • Frequency: Bimonthly
    • DOI: 10.18178/IJTEF
    • Editor-in-Chief: Prof.Tung-Zong (Donald) Chang
    • Executive Editor: Ms. Cherry L. Chen
    • Abstracting/ Indexing: Engineering & Technology Digital Library, ProQuest, Crossref, Electronic Journals Library , EBSCO, and Ulrich's Periodicals Directory
    • E-mail: ijtef@ejournal.net
IJTEF 2011 Vol.2(4): 318-322 ISSN: 2010-023X
DOI: 10.7763/IJTEF.2011.V2.124

The Internationalization Theory and Malaysian Small Medium Enterprises (SMEs)

Nik Ab Halim Nik Abdullah and Shahrul Nizam Mohd Zain
Abstract—Reduction in trade barriers and development in information and communication technology provide the opportunity for small and medium enterprises (SMEs) to expand their business into foreign market, even on the first day of its establishment. Such circumstances have lead into a debate among internationalization researchers on which theory effectively explain the firm’s internationalization process and whether the older theories are not relevant anymore these days. Therefore, the objective of this paper is to look at the internationalization process of Malaysian SMEs and how it fits the internationalization theories. Discussions are based on the related theories of internationalization namely the Uppsala Model, Network Approach and International New Venture or Born global. This paper also presents a descriptive analysis on the level of internationalization among Malaysian SMEs, reason for internationalization, the mode of entry used, and the reason for non-internationalization among firms that have no international activities. Data were collected through self-administered questionnaire and a total of 250 responds were received. Findings indicate that all three theories are still applicable as not all SMEs that internationalized are born global in nature. Exporting was the most used mode of entry and increasing profit was the main reason for internationalization. Potential difficulties and uncertainties in making profit appear to be the major reason for non-internationalization. Discussions of the findings, significance of the study and direction for future research are then discussed.

Index Terms—Born Global, Internationalization, Internationalization theory, Small and Medium Enterprises (SMEs).

Nik Ab Halim Nik Abdullah is with the College of Business, University Utara Malaysia, and Kedah, Malaysia (e-mail: abhalim@ uum.edu.my).
Shahrul Nizam Mohd Zain is with the College of Business, University Utara Malaysia, and Kedah, Malaysia (e-mail: ayulzidaichi@hotmail.com).

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Cite:Nik Ab Halim Nik Abdullah and Shahrul Nizam Mohd Zain, "The Internationalization Theory and Malaysian Small Medium Enterprises (SMEs)," International Journal of Trade, Economics and Finance vol.2, no.4, pp. 318-322, 2011.

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