Turning social capital into business: A study of the internationalization of biotech SMEs

This study examines how individuals' social capital and its dimensions affect biotech SMEs' acquisition of foreign market knowledge and financial resources during their internationalization processes. To examine these processes, we conducted a longitudinal cross-case study of 14 Swedish biotech SMEs. The results show not only that all dimensions (structural, relational, and cognitive) of social capital affect the acquisition of foreign market knowledge and financial resources, but also that the usefulness of individuals' social capital often changes during SMEs' internationalization. Social capital use can contribute to a rapid internationalization; however, this may impede a firm's understanding of a foreign market. We thus find that those biotech SMEs that experienced an incremental internationalization process were the most successful. (C) 2011 Elsevier Ltd. All rights reserved.