Literature review

The research of IE has been said to be fragmented and lacking theory (Keupp & Gassmann, 2009). Jones, M.V., Coviello & Tang (2011) provide a response for this criticism with a systematic review on IE between the years 1989 to 2009 by giving a comprehensive inventory on the domain. They classified the research of IE into three thematic main groups, which are entrepreneurial internationalization, international comparisons of entrepreneurship and comparative entrepreneurial internationalization. These thematic groups help in the future research and debates concerning the domain. (Jones, M. V., Coviello, & Tang, 2011)

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SME internationalization is seen as an important part of International entrepreneurship research as the emphasis is in the entrepreneurship and entrepreneurs as well as their characteristics, which represent the main part of the entrepreneurial perspective of SMEs. As more and more SMEs start operating international already from the beginning time is seen as a strategic dimension of internationalization. (Ruzzier et al., 2006)

Ribau et al. (2018) studied the internationalization of SMEs and found out that there is an increasing interest in the topics of internationalization process, the strategic perspective, and the network approach. In order to understand the challenges of SMEs better and adding new value to SME internationalization research scholars have brought up concepts such as BGs, INVs, and rapid/early internationalization. The research is mainly concentrated to Europe, which might result from the number of SMEs operating in the area. (Ribau et al., 2018)

Findings of a more recent study by Steinhäuser, Paula, & de Macedo-Soares (2020), who studied the main themes of internationalization of SMEs over a 20-year period (from 1998 to 2017), present that antecedents, patterns and outcomes are the most relevant themes rising from the literature. In addition, these themes are similar to previous frameworks in the IB literature.

The articles about antecedents are about the factors influencing SMEs to internationalize, and the ones on patterns refer to different actions SMEs take that lead to internationalization. The articles regarding outcomes of SME internationalization can be divided to three types depending on what the influencer is, individual, firm or the environment. (Steinhäuser, Paula,

& de Macedo-Soares, 2020)

Martineau and Pastoriza (2016) have studied the international involvement of established SMEs, which have been operating already a few years before their decision to export. Articles regarding the international involvement of SMEs are mostly about antecedents but also about international involvement and outcomes. Several theories stand out from the articles including international entrepreneurship theory, resource-based view of the firm, network theory and the stages theory of internationalization. The outcomes are divided into general and performance outcomes, of which the latter is criticized due to its limitations, e.g. of relying only on subjective measures. Studies present different results for the international involvement and performance outcomes and are justified with different theories. (Martineau & Pastoriza, 2016) Most research on internationalization and its theories has been said to concentrate on large multinational

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enterprises (MNEs). These theories aren’t always suitable in explaining internationalization of SMEs. (Ruzzier et al., 2006)

International business/management as well as corporate responsibility and corporate social responsibility have risen interest increasingly during the past years. Yet, the number of studies regarding the topic is still scarce. Kolk & van Tulder (2010) have focused on the research concerning CSR and sustainable development in international business and present five dimensions, which are meaningful for future research. These include the following drivers:

institutions, industry dynamics, firm-specific resources, capabilities as well as supply and demand (including international supply and production networks and corporate partners). (Kolk

& van Tulder, 2010) Egri & Ralston (2008) have examined 321 articles from international management journals regarding corporate responsibility (CR) concerning the environmental and social aspects and found out that the emphasis is more on ethics and governance than CSR and environmental responsibility. The focus has been in wealthier nations (especially the U.S.

and Western countries) and the poorer and less developed nations haven’t received as much interest. (Egri & Ralston, 2008)

Holtbrügge & Dögl (2012) have studied the international aspects of corporate environmental responsibility (CER) in their study and state that most CER research are based on two dominant theories the resource-based view and the institutional theory and name some other used theories including the stakeholder theory.

In addition, Pisani, Kourula, Kolk & Meijer (2017) have reviewed articles on CSR in international management/business and highlight that the research on SMEs is lacking, and the majority of the research is concerning large MNEs (Pisani, Kourula, Kolk, & Meijer, 2017).

CSR research should be tailored for SMEs and go beyond the “corporation” viewpoint of the concept. Although CSR might be more informal in SMEs than larger firms, it is more strategic for them. Networking impacts CSR regardless of the size, but how they influence stakeholders differs. Compliance and the personal involvement of managers are important factors in the adoption of CSR. (Zbuchea & Pînzaru, 2017)

Vázquez-Carrasco & López-Pérez (2013) reviewed 28 articles of CSR used in the SME context.

The main themes rising in these articles were regarding the idiosyncrasies of SMEs, the

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language and terminology used, the theoretical frameworks used to explain the phenomena, drivers and barriers as well as consequences of CSR. The oldest article was from 2006, but most (65%) were published after 2009, which makes the subject quite new. The predominant research methodology was qualitative, and quantitative studies were clearly underrepresented.

(Vázquez-Carrasco & López-Pérez, 2013)

Ortiz-Avram, Domnanovich, Kronenberg, & Scholz (2018) reviewed systematically 118 articles of CSR in the context of SME strategy. These articles were then categorized to four different categories: entrepreneur’s/owner-manager’s ethical values and social connections, the significance of CSR to business context and long-term performance, CSR integration and the importance of formal processes related to it, and the relevance of political issues. They found 56 terms used for describing CSR in SMEs. Not only does this demonstrate that the terms used for describing CSR in SMEs varies, but also the challenge of understanding how CSR can be applied to SME operations. (Ortiz-Avram, Domnanovich, Kronenberg, & Scholz, 2018) The fact that literature on SMEs and responsible business practices (RBPs) can be found in a variety of journal types, makes it difficult to gather and thus hard to cover comprehensively. (Moore &

Spence, 2006)

Applying the stakeholder approach in responsible business practices can possibly contribute to a sustainable competitive advantage for a firm similarly as with CSR. Trusting, trustworthy and cooperative behavior of a firm towards its stakeholders can lead to a competitive advantage, which can improve the performance of the business. (Jones, T., 1995) Also, stakeholders are content with the cooperation with firms, which have implemented responsible business practices besides their normal business (Marín, Rubio, & Maya, 2012) Longo, Mura & Bonoli (2005) state that socially responsible behavior of SMEs creates value for the firm, customers may become more loyal to the company and the relationships with employees and the local environment can improve. Herrera Madueño, Larrán Jorge, Martínez-Martínez, & Martínez Conesa (2015) also present that responsible business practices towards different stakeholders not only strengthens the linkages to them but also impacts positively on firm’s competitiveness.

The stakeholder groups consist of employees, the environment, customers and society (Herrera Madueño, Larrán Jorge, Martínez-Martínez, & Martínez Conesa, 2015). Furthermore, these key stakeholders have been later used also in the study of Martínez-Martínez, Herrera Madueño,

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Larrán Jorge, Lechuga Sancho (2017). Aligning with Herrera Madueño et al. (2015) and Martínez-Martínez et al. (2017) these four key stakeholder groups are also used in this study.

Margolis & Walsh (2003) have reviewed 127 studies and state that there is a positive association between a company’s social and financial performances. In addition, there is very little evidence of having negative association between them. (Margolis & Walsh, 2003) Also, Orlitzky, Schmidt and Rynes (2003) have come to a similar conclusion in their meta-analysis of 52 studies. According to them especially social responsibility, and to some extent also environmental responsibility, is probable to pay off. (Orlitzky, Schmidt, & Rynes, 2003)