Internationalisation of SMEs from a Theoretical Perspective: Challenges, Strategies and Implications

SMEs are vital for economic development, equitable income distribution, and economic democracy. The internationalisation of SMEs is becoming an increasingly important topic in global business. This study investigates SMEs’ internationalisation from a theoretical perspective. Beginning with the significance of SMEs and their participation in the EU's trade, we present a literature review on the determinants of SME internationalisation and the challenges SMEs encounter when entering international markets. We then present the mainstream theoretical framework of firms’ internationalisation, which is traditionally focused on large firms. In this respect we discuss some studies that have developed frameworks specifically targeted at SMEs. Furthermore, the study examines the crucial role of networks and clusters in facilitating SME internationalisation and the impact of EU support policies in promoting SME internationalization.