Novel methodologies to explain SMES’ internationalisation

Abstract

Family firms are the oldest and most predominant form of business in the world, it represents 70 to 90 per cent of the global Gross Domestic Product (GDP). Family firms worldwide vary from micro and small firms to large corporations which dominate the global business panorama. Family firms are an area of research which has drawn rising interest given the impact and influence that such firms have on the economy worldwide. One of the key challenges that these firms face in today´s globalized markets is internationalization. Although various scholars have studied the various factors which play a role in this process, it is indeed necessary to adopt a more integrated vision. Internationalization is, at its core, a strategic decision. Therefore, it is essential to implement a methodology which accentuates an integrated vision and, considers the role and interplay of the various aspects influencing this decision, and also highlights the existent interdependencies. Game theory is the study of decision making by various rational players where decisions made by a player have repercussions on the outcomes of the other players. Strategic interdependence is the essence of game theory. In this paper, we aim to shed new light on one of the most challenging topics in family business literature by using the robust analytical approach provided by game theory. The internal consistency and mathematical fundamentals of game theory make it a forefront strategic tool to study the complex decision-making process related to internationalization, which this chapter will explore. The literature review undertaken will also address policy recommendations since these may contribute to the internationalization process of these firms, which are so vital for our economic landscape, as well as enabling a better knowledge of the impact of policy actions on such processes.