The internationalisation of small and medium sized enterprises and the liability of complexity

This contribution focuses on the process related to the decision of
entry into a complex market, as a relevant expression of international
entrepreneurial attitude from a small firm. The construct of market complexity
has rarely been adopted and explored in the international business literature,
even though it may represent a useful complement in the market foreignness
theory, in order to reach a deeper understanding of the liability of foreignness.
Market complexity encompasses psychic distance, institutional distance,
cultural distance and additionally includes the foreign market heterogeneity
and volatility, competitive conditions and channels to access to market
opportunities (distribution channels, business networks). An empirical research
based on six case studies highlights the different dimensions of the liability of
complexity, its subjective and objective nature, the influence on entry modes
selection and the impact on the firms’ knowledge base after the entry into a
complex market.