Bouncing back to the global market : How international heritage affects the re-internationalization process of Portuguese and Swedish SMEs

Abstract: Globalization has driven the internationalization of both SMEs and large enterprises and has caused new opportunities and challenges to emerge. As a result of these new challenges, such as increased foreign competition, or due reasons such as lack of international experience, change in strategy, or dissatisfaction about their performance, many internationalized firms withdraw from their international operations. Permanent exit of international markets may not always be the best option. Re-entering these markets can be rewarding as the intangible resources gained from their initial internationalization experience may facilitate their international market re-entry, thereby having an advantage over newly internationalizing firms.   The main purpose of this study is to contribute to the concept of the re-internationalization process. This is done by exploring the relationship between international heritage and the different stages of the re-internationalization process, which consists out of: the initial internationalization experience, de-internationalization, the international time-out stage and the firm’s international market re-entry.   Based on the results of this study, it can be concluded that SMEs apply international heritage differently, based on their level of resource commitment to the international market. This study shows that firms with a higher level of resource commitment tend to apply their international heritage on a global level, whereas firms that commit less resources only apply their international heritage in the market in which the international heritage was gained. Furthermore, while the disruptiveness of the market exit varied between the case companies, all four firms continued to commit resources to the exited market, albeit to varying degrees. Lastly, the empirical findings show that the role of international heritage is not a facilitating one, but that it causes the firm to be more careful.