Social Ties Driving Internationalization for SMEs from Azores Islands, Portugal

Social Ties Driving Internationalization for SMEs from Azores Islands, Portugal

A recent study of a small fish exporter from the Azores Islands, an autonomous Portuguese archipelago in the North Atlantic, some 900 miles from the European mainland, offers useful insights on the key drivers of internationalization for companies based on small islands. It illustrates the critical role of social ties in guiding and supporting island-based SMEs towards successful internationalization. Often challenged by „isolation‟ and distance from the core economies, and by dis-economies of scale and high transportation cost, these SMEs from small islands tend to exhibit relatively low international involvement. The resultant economic weakness associated with such islands often fuels emigration.  In the case of the small fish exporter from the Azores Islands investigated by Camara and Simeos (2008), this meant access to major emigrant communities in Canada (British Columbia and Quebec) and the United States (California, Hawaii, Massachusetts, and Rhode Island) among others. There is evidence, however, that some island-based SMEs leverage the network of family and social ties existing between those remaining on the islands and those that emigrated to compete in international markets.
Source: Camara and Simeos (2008)

Growth Motives.

Growth Motives.

Growth opportunities associated with international markets were identified as a key driver of firm internationalization in several recent studies. Orser et al. (2008), for example, reports say that after allowing for the impacts of firm size and sector, Canadian legal firms whose owners had expressed growth intentions were more than twice as likely to export, than those whose owners did not indicate growth ambitions. Firms‟ overseas venturing decision also seems to be motivated by a need for business growth, profits, an increased market size, a stronger market position, and to reduce dependence on a single or smaller number of markets. The possibility of growth in other markets and increased profit opportunities from international expansion were highlighted as key stimuli for exporting among the Australian, British, Spanish, Swedish, and US firms investigated in recent studies.