The effect of outward and inward internationalisation on different types of innovation: Evidence from UK SMEs

Abstract

This paper empirically examines the effect of outward internationalisation, inward internationalisation activities and outward-inward internationalisation (i.e., exporting and importing) on different types of innovation undertaken by UK SMEs. Specifically, we differentiate between product innovation and process innovation and examine the potential effect that they can generate individually and in combination. The results show that both inward and outward internationalisation support product and process innovation in SMEs. However, such an effect is found to be stronger for the combined outward-inward internationalisation operations than for the single mode undertaken by SMEs. The results are found to be robust across the different types of innovation. However, sub-sample analysis shows that, although innovation responds to different internationalisation operations in micro and small firms, for medium-sized firms, only the combination of outward and inward internationalisation operations increases the probability of undertaking both innovations. Using the organisational learning theory, we argue that engaging in both internationalisation activities simultaneously enables firms to acquire a more diverse and richer set of knowledge and key information — through double loop learning, which is translated into increased levels of innovation. Hence, our results have important theoretical, managerial, and policy implications and stimulate the existing debate in the area.

Publication DOI: https://doi.org/10.1016/j.intman.2021.100903
Divisions: College of Business and Social Sciences > Aston Business School > Economics, Finance & Entrepreneurship
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College of Business and Social Sciences > Aston Business School
Additional Information: © 2021, Elsevier. Licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International http://creativecommons.org/licenses/by-nc-nd/4.0/
Uncontrolled Keywords: Innovation,Inward internationalisation,Learning,Outward internationalisation,Process innovation,Product innovation,SMEs,Business and International Management,Finance,Strategy and Management
Publication ISSN: 1873-0620
Full Text Link:
Related URLs: http://www.scop ... tnerID=8YFLogxK (Scopus URL)
https://www.sci ... 082X?via%3Dihub (Publisher URL)
PURE Output Type: Article
Published Date: 2021-11-26
Published Online Date: 2021-11-26
Accepted Date: 2021-11-26
Authors: Idris, Bochra (ORCID Profile 0000-0001-6521-7858)
Saridakis, George
Khan, Zaheer

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Version: Accepted Version

Access Restriction: Restricted to Repository staff only until 26 November 2023.

License: Creative Commons Attribution Non-commercial No Derivatives


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