Devoting Employees to IB and R&D Activities and the International Performance of Early Internationalizing SMEs

This study explores the non-linear effect of labour resources devoted to IB and R&D activities on the international performance of early internationalizing SMEs. Drawing on literature regarding international entrepreneurship and a resource-based view, hypotheses are developed and tested using data collected from early internationalizing SMEs in South Korea. The results indicate that the proportion of employees devoted to IB activities has an inverted U-shaped relationship with two types of performance. Proportion of employees devoted to R&D activities is found to have an inverted U-shaped relationship with satisfaction with foreign market growth, albeit marginally. This research would be the first to provide empirical evidence that the labour resources devoted to IB and R&D activities have a non-linear relationship with performance in early internationalizing SMEs. The findings complement the extant literature that indicates that both the quantity and quality of labour resources is of importance to early internationalizing SMEs.