The influence of social capital on SME's international market commitment

by Bilyana Koleva

Institution: Högskolan i Halmstad
Year: 2015
Keywords: internationalization; SMEs; commitment; social capital; Social Sciences; Economics and Business; Business Administration; Samhällsvetenskap; Ekonomi och näringsliv; Företagsekonomi; International Marketing; Internationell marknadsföring
Record ID: 1374371
Full text PDF: http://urn.kb.se/resolve?urn=urn:nbn:se:hh:diva-28439


The question of the influence of social capital on internationalization has been an important researched topic, as one of the factors for entering and post-entry operation on a foreign market. However there is a lack of knowledge, deepening on the importance social networks and relationships have for committing to a big foreign market such as the United States. The purpose of this research is to provide a better understanding of the importance of a network of social ties when it comes to a firms’ commitment to a foreign market. This study has the goal of proving knowledge on the importance of social capital to firms’ commitment to a foreign market, by explaining better its positive and negative sides over the process. The theory in this work is being divided into three parts: internationalization of SMEs, social capital and influence of social capital on the firm’s commitment to a foreign market. The theoretical framework is based on the previous researches done in accordance to the topic of this thesis. A model is presented at the end of the theoretical framework in order to be outlined the process of analyzing the three firm cases later on. This study is using qualitative research method in order to find an answer to the research question set at the beginning of the project. Abductive method, combing the inductive and deductive approaches, is chosen as a way to interpret and explain causality on the elected topic and to develop the existing theory. Primary and secondary data have been collected through the research process by conducting interviews with firm representatives, looking at official web pages and reports. Three Swedish companies have been engaged in this research because of their successful establishment on the U.S. market. The results of this study are showing the importance social capital in the internationalization process. Networks should be considered as a crucial issue and cannot be neglected since this may lead to bad results, performance, loss of growth and position on the foreign market. However, different commitment results are coming from different approaches followed by companies. There might be both positive and negative results outlined from using social capital, which will lead to increased or decreased mode of internationalization.