Skip to main navigation menu Skip to main content Skip to site footer

Export Intensity, Geographic Diversification and the Role of Public Support: The Evidence from Old and New Europe SMEs



Objective: The objective of the article is to investigate how public support (both financial and non-financial) affects the geographic scope and export intensity of SMEs originating from Old (EU15) and New Europe (the CEE12 region). In particular, the work considers the direct and indirect effects (via geographic scope) of public support on the export intensity of SMEs.

Research Design & Methods: The empirical analyses use a large, cross-country, cross-industry dataset of 2 375 European SMEs from 27 countries.

Findings: The study findings indicate that only financial public support is positively, directly and indirectly associated with the export intensity of European SMEs, regardless of the origin. The results related to non-financial public support are less conclusive. Additionally, the study reveals that despite significant, firm-level differences characterising internationally oriented SMEs from Old and New Europe, the examined relationships and effects of control variables are largely the same.

Implications & Recommendations: The article offers clear insights into the significance of financial vs. non-financial public support programmes for internationalisation activities of SMEs, encouraging further research to focus on the question which firms should receive public support and how to increase the awareness and propensity of the owners/managers of SMEs to consult public support providers.

Contribution & Value Added: The originality of this work lies in investigating the impact of public support for internationalisation efforts (export intensity and geographic diversification) of SMEs originating from different contexts of the EU15 and CEE12 countries.


public support, export intensity, geographic diversification, SMEs, CEE



  1. Aldrich H.E., & Auster, E. (1986). Even dwarfs started small: Liabilities of size and age and their strategic implications. Research in Organizational Behavior, 8, 165-198.
  2. Alonso-Nuez, M.J., & Galve-Gorriz, C. (2012). The impact of public programs on the survival and profits of stratups: Evidence from a region of Spain. Journal of Developmental Entrepreneurship, 17(2), 1-23.
  3. Audet, J., Berger-Douce, S. & St-Jean, E. (2007). Perceptual barriers preventing small business owners from using public support services: Evidence from Canada. International Journal of Entrepreneurship, 11, 27-48.
  4. Audet, J., & St-Jean, E. (2007). Factors affecting the use of public support services by SME owners: Evidence from a periphery region of Canada. Journal of Developmental Entrepreneurship, 12(2), 165-180.
  5. Autio, E., Sapienza, H.J., & Almeida, J.G. (2000). Effects of age at entry, knowledge intensity, and imitability on international growth. Academy of Management Journal, 43(5), 909-924.
  6. Bannò, M., Piscitello, L. & Varum, C.A. (2014). The Impact of Public Support on SMEs’ Outward FDI: Evidence from Italy. Journal of Small Business Management, 52(1), 22-38.
  7. Baron, R.M., & Kenny, D.A. (1986). The moderator-mediator variable distinction in social psychological research: Conceptual, strategic, and statistical considerations. Journal of Personality and Social Psychology, 51(6), 1173-1182.
  8. Berrone, P., Gertel, H., Giuliodori, R.,Bernard, L., & Meiners, E. (2014). Determinants of Per-formance in Microenterprises: Preliminary Evidence from Argentina. Journal of Small Business Management, 52(3), 477-500.
  9. Bonaccorsi, A. (1992). On the relationship between firm size and export intensity. Journal of Inter-national Business Studies, 23, 605-635.
  10. Bruton, G.D., Lau, C.N., & Obloj, K. (2014). Institutions, Resources, and Firm Strategies: A Comparative Analysis of Entrepreneurial Firms in Three Transitional Economies. European Journal of International Management, 8(6), 697-720.
  11. Capar, N., & Kotabe, K. (2003). The relationship between international diversification and perfor-mance in service firms. Journal of International Business Studies, 34(4), 345-355. 10.1057/palgrave.jibs.8400036
  12. Churchill, W. (1946). Speeches of Winston Churchill: Sinews of Peace, March 5, 1946, Westminster College, Fulton, Missouri. Retrieved on February 1, 2016 from:
  13. Cieślik, J., Kaciak, E., & Welsh, D. (2012). The impact of geographic diversification on export performance of small and medium-sized enterprises (SMEs). Journal of International En-trepreneurship, 10(1), 70-93.
  14. Cieślik, J., & Kaciak, E. (2009). The speed of internationalization of entrepreneurial start-ups in a transition environment. Journal of Developmental Entrepreneurship, 14(4), 375-392.
  15. Ciszewska-Mlinarič, M., & Mlinarič, F. (2010). Small Firms in a Small Country: Managerial Factors, Internationalization and Performance of Slovenian SMEs. Managing Global Transitions, 8(3), 239-259.
  16. Cohen, J., & Cohen, P. (1983). Applied multiple regression/correlation analysis for the behavioural sciences (2nd ed.). Hillsdale, NJ: Lawrence Erlbaum Assocites.
  17. Dejo-Oricain, N., & Ramírez-Alesón, M. (2009). Export Behaviour: a Study of Spanish SMEs. GCG: Revista de Globalización, Competitividad & Gobernabilidad, 3(2), 52-67.
  18. Driffield, N., Du, J., & Girma, S. (2008). Optimal geographic diversification and firm performance: evidence from the U.K. Journal of Productivity Analysis, 30(2), 145-154.
  19. Erramilli, M.K. (1991). The Experience Factor in Foreign Market Entry Behaviour of Service Firms. Journal of International Business Studies, 22(3), 479-501.
  20. European Commission. (2010). Internationalisation of European SMEs. Entrepreneurship Unit Directorate-General for Enterprise and Industry, European Commission & EIM Business & Policy Research, Brussels.
  21. Fischer, E., & Reuber, A.R. (2003a). Targeting Export Support to SMEs: Owners’ International Experience as a Segmentation Basis. Small Business Economics, 20(1), 69-82.
  22. Fischer, E., & Reuber, A.R. (2003b). Support for Rapid-Growth Firms: A Comparison of the Views of Founders, Government Policymakers, and Private Sector Resource Providers. Journal of Small Business Management, 41(4), 346-365.
  23. Gashi, P., Hashi, I., & Pugh, G. (2014). Export behaviour of SMEs in transition countries. Small Business Economics, 42(2), 407-435.
  24. Grant, R.M. (1987). Multinationality and performance among British manufacturing companies. Journal of International Business Studies, 18(3), 79-89.
  25. Hall, G., & Tú, C. (2004). Internationalization and size, age and profitability in the United Kingdom. In L.P. Dana (Ed.) Handbook of Research on International Entrepreneurship (pp. 596-613). Cheltenham: Edward Elgar.
  26. Hernández, V., & Nieto, M.J. (2015). The effect of the magnitude and direction of institution-al distance on the choice of international entry modes. Journal of World Business, 50(1), 122-132.
  27. Hitt, M.A., Hoskisson, R.E., & Kim, H. (1997). International diversification: effects on innovation and firm performance in product diversified firms. Academy of Management Journal, 40, 767-798.
  28. Javalgi, R.G., & Grossman, D.A. (2014). Firm Resources and Host-Country Factors Impacting Internationalization of Knowledge-Intensive Service Firms. Thunderbird International Business Review, 56(3), 285-300.
  29. Johanson, J., & Vahlne, J.E. (2003). Business Relationship Learning and Commitment in the Internationalization Process. Journal of International Entrepreneurship, 1(1), 83-101.
  30. Johanson J., & Vahlne, J.E. (2009). The Uppsala internationalization process model revisited: From liability of foreignness to liability of outsidership. Journal of International Business Studies, 40(9), 1411-143.
  31. Kale S., & Arditi, D. (1998). Business failures: Liabilities of newness, adolescence, and smallness. Journal of Construction Engineering & Management, 124(6), 458-464.
  32. Katsikeas C.S., Leonidou, L., & Morgan, N.A. (2000). Firm-level export performance assessment: review, evaluation, and development. Journal of the Academy of Marketing Science, 28(4), 493-511.
  33. Kuivalainen, O., Puumalainen, K., Sintonen, S., & Kyläheiko, K. (2010). Organisational Capabilities and Internationalisation of the Small and Medium-Sized Information and Communications Technology Firms. Journal of International Entrepreneurship, 8(2), 135-155.
  34. Kyvik, O., Saris, W., Bonet, E., & Felício, J. (2013). The internationalization of small firms: The relationship between the global mindset and firms’ internationalization behaviour. Journal of International Entrepreneurship, 11(2), 172-195.
  35. Lee, H-U., & Park, J-H. (2006). Top Team Diversity, Internationalization and the Mediating Effect of International Alliances. British Journal of Management, 17(3), 195-213. 10.1111/j.1467-8551.2006.00501.x
  36. Liu, H., Jiang, X., Zhang, J., & Zhao, X. (2013). Strategic Flexibility and International Venturing by Emerging Market Firms: The Moderating Effects of Institutional and Relational Factors. Journal of International Marketing, 21(2), 79-98.
  37. Mason, C., & Brown, R. (2013). Creating good public policy to support high-growth firms. Small Business Economics, 40(2), 211-225.
  38. Mion, G., & Muûls, M. (2014). Investigation into the Extensive and Intensive margins of Growth in the Value of UK Exports and the Role of SME Exporters. Research report available at
  39. Musteen, M., & Datta, D. (2011). Learning about foreign markets: A study of Czech SMEs. Journal of International Entrepreneurship, 9(2), 91-109.
  40. Nachum, L. (2004). Geographic and Industrial Diversification of Developing Country Firms. Journal of Management Studies, 41(2), 273-294.
  41. Neter, J., Kutner, M.H., Nachtsheim, C.J., & Wasserman, W. (1996). Applied Linear Regression Models. Irwin Press, Illinois.
  42. Norman, C., & Bager-Sjorgen, L. (2006). Public support to innovative ventures: Does it have any impact?. paper presented at the Nordic Conference on Small Business Research, Stockholm, Sweden.
  43. North, D., Smallbone, D., & Vickers, I. (2001). Public Sector Support for Innovating SMEs. Small Business Economics, 16(4), 303-317.
  44. Nummela, N., Saarenketo, S., & Puumalainen, K. (2004). A global mindset: a prerequisite for successful internationalization?. Canadian Journal of Administrative Sciences, 21(1), 51-64.
  45. OECD. (2007). Glossary of Statistical Terms. Organisation for Economic Co-operation and Develop-ment. Retrieved on February 1, 2016 from
  46. Onkelinx, J., & Sleuwaegen, L.E. (2010). Internationalization Strategy and Performance of Small and Medium Sized Enterprises (National Bank of Belgium Working Paper No. 197). Available at SSRN: or
  47. Orser, B., Fischer, E., Hooper, S., Reuber, R., & Riding, A. (1999). Beyond Borders, Ottawa: Depart-ment of Foreign Affairs and International Trade.
  48. Paus, E. (2012). Confronting the Middle Income Trap: Insights from Small Latecomers. Studies in Comparative International Development, 47(2), 115-138.
  49. Ramsden, M., & Bennet, R.J. (2005). The benefits of external support to SMEs: “Hard” versus “soft” outcomes and satisfaction levels. Journal of Small Business and Enterprise Development, 12(2), 227-243.
  50. Reuber, A.R., & Fischer, E. (1997). The influence of the management team’s international experience on the internationalization behaviors of SMEs. Journal of International Business Studies, 28(4), 807-825.
  51. Rodríguez, A., & Nieto, M.J. (2012). The internationalization of knowledge-intensive business services: the effect of collaboration and the mediating role of innovation. Service Industries Journal, 32(7), 1057-1075.
  52. Ruigrok, W., Amann, W., & Wagner, H. (2007). The internationalization-performance relationship at Swiss firms: a test of the S-shape and extreme degrees of internationaliza-tion. Management International Review, 47(3), 349-368.
  53. Sapienza, H.J., De Clercq, D., & Sandberg, W. (2005). Antecedents of international and domestic learning effort. Journal of Business Venturing, 20(4), 437-457. 10.1016/j.jbusvent.2004.03.001
  54. Sapienza, H.J., Autio, E., George, G., & Zahra, S.A. (2006). A capabilities perspective on the effects of early internationalization on firm survival and growth. Academy of Management Review, 31(4), 914-933. 10.5465/AMR.2006.22527465
  55. Sarder, J.H., Ghosh, D., & Rosa, P. (1997). The importance of support services to small enterprise in Bangladesh. Journal of Small Business Management, 35(2), 26-36.
  56. Sousa, C.M.P. (2004). Export performance measurement: an evaluation of the empirical research in the literature. Academy of Marketing Science Review, 9(12), 1-23.
  57. Wach, K. (2012). Europeizacja małych i średnich przedsiębiorstw: rozwój przez umiędzynarodowie-nie. Warszawa: Wydawnictwo Naukowe PWN.
  58. Wheeler, C.N., Ibeh, K.I.N., & Dimitratos, P. (2008). UK export performance research – review and implications. International Small Business Journal, 26(2), 207-239.
  59. Wiklund, J., & Shepherd, D.A. (2003). Aspiring for, and Achieving Growth: The Moderating Role of Resources and Opportunities. Journal of Management Studies, 40(8), 1911-1941.
  60. Williams, D. (2011). Impact of firm size and age on the export behaviour of small locally owned firms: a fresh insight. Journal of International Entrepreneurship, 9(2), 152-174.
  61. Yiu, D.W., Lau, C.M., & Bruton, G.D. (2007). International venturing by emerging economy firms: The effects of firm capabilities, home country networks, and corporate entrepreneurship. Journal of International Business Studies, 38(4), 519-540.
  62. Yoo, S-J., Mackenzie, N.G., & Jones-Evans, D. (2012). Public sector support and technology-based SMEs in peripheral areas – The case of North Wales. Journal of Enterprising Culture, 20(1), 83-104.
  63. Zaheer, S. (1995). Overcoming the liability of foreignness. Academy of Management Journal, 38(2), 341-363.
  64. Zahra, S.A., Ireland, R.D., & Hitt. M.A. (2000). International Expansion by New Venture Firms: International Diversity, Mode of Market Entry, Technological Learning, and Performance. The Academy of Management Journal, 43(5), 925-950.
  65. Zhou, L. (2007). The effects of entrepreneurial proclivity and foreign market knowledge on early internationalization. Journal of World Business, 42(3), 281-293.


Download data is not yet available.