Pre-liberalization foundations and the FDI-based internationalization of SMEs from emerging markets

Research on the internationalization of small and medium enterprises based in emerging markets (EM-SMEs) is gaining momentum, yet, less is known about the specific factors that deter EM-SMEs’ from internationalizing via foreign direct investment (FDI). In this paper, using institutional and organizational imprinting perspectives, we argue that EM-SMEs founded in the era prior to market liberalization are less likely to internationalize via FDI than those founded during or after market liberalization. We also argue that this effect is moderated by EM-SMEs’ size and ownership dispersion. Our data used to test our hypotheses is based on 2,277 SMEs from 14 emerging markets. Overall, we contribute to an improved understanding of the factors that determine the FDI-based internationalization of SMEs from emerging markets.