Firm internationalisation has long been regarded as either an incremental process, or a pattern of investment explained by rational economic analysis, wherein firms gravitate outwards towards physically close countries, or base their decisions for international expansion on evaluating the cost of economic transactions. Traditionally, both of these separate literature thrusts have focused predominately on the large firm as the unit of analysis with, until recently, seldom research investigating the internationalisation process of the small-to-medium sized enterprise (SME). These firms now play an important role in the industrialised economy, providing significant export potential. However, much of the extant literature fails to provide a clear explanation of how the smaller firms overcome their idiosyncratic resource poverty based constraints.
Researchers are now recognising networking activities, interorganisational and interpersonal, coupled with an entrepreneurial proclivity as instrumental in driving SME internationalisation. Using a sample of 141 SMEs from an array of industries, this thesis looks to conceptualise and operationalise networking as a distinct capability - defined as the ability of the firm to initiate, maintain and coordinate the activities of interorganisational relationships so as to gain access to resources, be they tangible or intangible, held by other network members. This investigation provides evidence to suggest that networking capability mediates the relationship between international entrepreneurial intensity and an organisation's learning capabilities. In turn, this engenders greater levels of firm innovation and thus higher levels of international performance. These results advocate the salience of networking in the successful internationalisation of the SME. Aside from its theoretical endowment, the research will also assist policy makers and practitioners alike in engendering greater international SME performance and efficacy.