Social capital and its influence on changes in internationalization mode among small and medium-sized enterprises

This article explores how social capital influences a firm to change its internationalization mode. The authors use an in-depth qualitative study to identify 36 internationalization mode changes in ten New Zealand and ten Swedish small and medium-sized enterprises. This article contributes to the internationalization mode literature by focusing on relationships and mode change. Using the network approach, the authors develop three categories of social capital and discuss their role in influencing mode change. The roles include the efficacy role, the serendipity role, and the liability role of social capital. These three roles incorporate both the positive and the negative aspects of social capital. The liability role is the most frequently observed form of social capital to influence mode change. The most frequent type of mode change is toward a high-control internationalization mode.