SME Internationalization: the Impact of Information Technology and Innovation

Innovation and information technology (IT) are critical to effective knowledge management (KM) This study examines the effects of innovation on small- and medium-sized enterprise (SME) internationalization and the direct and moderating impacts of information and knowledge circulation during IT adoption. The primary data consists of a survey of 612 German SMEs based in the Baden-Wurttemberg area. The purpose of the survey was to find out to what extent German SMEs had introduced and were using IT tools (electronic customer relationship management [e-CRM] and enterprise resource planning [ERP]), were interested in innovating and how much they valued export turnover. The results show that IT has no direct influence on internationalization. The implementation of ERP and e-CRM acts as a moderator of the innovation-internationalization relationship. The results suggest that developing innovation, while also increasing the level of IT, can improve SME internationalization. Several studies have mentioned that the research findings related to SME internationalization are country-specific. The application of the European Union (UE) classification to define our sample and the use of German SME data makes our empirical evidence comparable at the European level. However, the generalization of our results outside Europe is questionable. Therefore, studies with comparative samples are called upon to extend our results. Moreover, this study is limited to export intensity, leaving out the multiplicity of other factors in internationalization. Thus, the adoption of a dependent variable to test export intensity would extend our results. The results from this study suggest that SMEs might be able to enhance their innovation by implementing comprehensive ERP and e-CRM, leading to higher export intensity. The results support future research related to the functions of IT in the export process of internationalized SMEs.