The internationalisation process of small- and medium-sized firms and the liability of complexity

Abstract

This contribution focuses on the process related to the decision of entry into a complex market, as a relevant expression of international entrepreneurial attitude from a small firm. The construct of market complexity has rarely been adopted and explored in the international business literature, even though it may represent a useful complement in the market foreignness theory, in order to reach a deeper understanding of the liability of foreignness. Market complexity encompasses psychic distance, institutional distance, cultural distance and additionally includes the foreign market heterogeneity and volatility, competitive conditions and channels to access to market opportunities (distribution channels, business networks). An empirical research based on six case studies highlights the different dimensions of the liability of complexity, its subjective and objective nature, the influence on entry modes selection and the impact on the firms’ knowledge base after the entry into a complex market.