Domestic Business-to-Business Relationships and the Internationalization of SMEs: Evidence from Switzerland

Abstract

Relationships and networks are commonly understood to play an important role in firms’ internationalization. With this proposition in mind, this paper investigates the link between domestic business-to-business ties and firm internationalization in a sample of 502 small and medium-sized enterprises (SMEs) from Switzerland. Following a two-step approach, this paper analyzes how transactional relationships among SMEs and publicly listed domestic companies are linked to the export propensity and export intensity of SMEs. The empirical results reveal the heterogeneous effects of these relationships. Although the domestic business-to-business ties are positively associated with the export propensity of SMEs, they are negatively related to the export intensity of SMEs.

Keywords: Small and medium-sized enterprises (SMEs), Internationalization, Export propensity, Export intensity, Business-to-business relationships

JEL Classification: L14, L25, L26, M16