The role of knowledge in the early internationalization. A study of Finnish cleantech companies

Abstract

Knowledge plays central role in the internationalization process. This study focuses on analyzing the role of different types of knowledge in the initial internationalization of early internationalizing firms. The impact of different types of knowledge, namely general internationalization knowledge, foreign business knowledge, social capital and technological knowledge, is analysed by concentrating on the knowledge bases of key manager’s and the decision-making regarding the entry market and entry mode strategies. In addition, the role of knowledge in the outcome of initial internationalization process is covered.

The study focuses on cleantech sector. As a rapidly growing industry, it offers interesting challenges in global scale for Finnish companies and their key managers. The study is based on a qualitative research approach and follows a multiple case study method. The chosen four case companies are SMEs which have internationalized within six years of their foundation and have gone through their initial internationalization phase.

Results of the study indicate that knowledge plays a central role in the internationalization process overall. From the different types of knowledge, especially the foreign business knowledge and social capital were emphasized. The results also indicate that general internationalization knowledge is important as it enhances the process. However, more crucial for the outcome is the foreign business knowledge. Similar to prior studies, the results support the central role of network relationships in the internationalization of recently established firms. However, despite of its fundamental role, the results of the study suggest that knowledge related factors cannot be regarded as the most important determinants in the strategic decision-making and the outcome of the internationalization.