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The Internationalization of Small and Medium-Sized Enterprises: A Policy Perspective

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Abstract

Small and medium sized firms play an important role in the process of creative destruction. The focus of the paper is on the international diffusion of small and medium sized firms innovations. Small and medium sized firms face two challenges in globalization: property rights protection and barriers to entry. We suggest that these barriers can frequently be circumvented by using existing multinationals as international conduits for small and medium size firms' innovations. However, such intermediated modes of expansion is adversely affected by transaction difficulties and intermediator's rent extraction. We raise two categories of questions: (i) is the private sector systematically making the wrong choice between the direct and intermediated mode of international expansion? and (ii) What should be the policy guidelines to improve the overall rate of international diffusion of innovation by small and medium sized enterprises.

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Authors and Affiliations

  1. U.S. Small Business Administration and Merrick School of Business, University of Baltimore, Baltimore, MD, 21201-5779

    Zoltan J. Acs

  2. Faculty of Business, University of Alberta, Edmonton, Alberta, T6G 2R6

    Randall Morck

  3. Stern School of Business, New York University, New York, NY, 20012

    J. Myles Shaver

  4. School of Business Administration, University of Michigan, Ann Arbor, MI, 48109-1234

    Bernard Yeung

Authors
  1. Zoltan J. Acs
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  2. Randall Morck
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  3. J. Myles Shaver
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  4. Bernard Yeung
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Acs, Z.J., Morck, R., Shaver, J.M. et al. The Internationalization of Small and Medium-Sized Enterprises: A Policy Perspective. Small Business Economics 9, 7–20 (1997). https://doi.org/10.1023/A:1007991428526

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