SME Internationalization and Performance: The Role of Ownership Structure

This study aims to explore the effects of the degree of internationalization (DOI) on the performance of small- and medium- sized enterprises (SMEs), and the moderating effects of ownership structure. Using data from 232 listed Korean SMEs in manufacturing sectors during the 2003–2013 period, we reveal that there is a U-shaped curvilinear relationship between DOI and performance. In addition, that link varies by ownership type. Family ownership, foreign ownership, and domestic institutional ownership moderate the U-shaped relationship between DOI and performance such that the negative side of the U-shape becomes weaker and the positive side becomes stronger. However, both foreign ownership and domestic institutional ownership negatively influence the joint effects of DOI and family ownership on performance such that the negative side of the U-shape becomes stronger and the positive side becomes weaker for SMEs with higher family ownership. The implications of these findings for research and managerial practice are discussed.