Small- and medium-sized enterprise internationalization: Towards the knowledge-based model

Firm internationalization research has grown throughout the last 50 years resulting in a number of theories and models. Although each theory and model enables us to see some parts of the picture, a holistic approach is needed to provide us a full picture. The so-called knowledge-based models proposed so far drew upon the transaction-cost theory, the social capital theory, and the knowledge management models. This paper reviews previous research and builds a more comprehensive knowledge-based model of small and medium-sized enterprises internationalization. The model includes “knowledge factors”, which we identified from internationalization literature. These include the market knowledge and the experiential knowledge composed of network knowledge, cultural knowledge, and entrepreneurial knowledge. Acquisition as well as utilization of each kind of knowledge during the different phases of internationalization is presented. The model is a step towards deeper understanding of the role of knowledge in SME internationalization