Market characteristics, firm capabilities and international involvement of Australian small and medium enterprises

Against a backdrop of historically low trade protection amplified by a very high post-float Australian dollar, this study of Australian small and medium fim1s sought to address to main questions: What factors drove the firms in this sample to become internationally involved? Using survey data, and drawing from intemationalisation theory, we examined the role of internal capabilities, market characteristics and control variables such as firm size to address these two questions. The findings were that a firm's idiosyncratic resources namely, its technological capability and international networking, had a greater impact on international involvement compared to external factors, such as the existence of a global market for a firm's product (market globalness) . While market globalness can pull firms towards international involvement, it is their internal technological capability and ability to network with international partners that have a stronger effect These findings appear to be applicable to both the manufacturing and service firms in this survey.