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Board interlocks in SMEs and the formation of international joint ventures.

Francesco Debellis, Michele Pinelli


Small and medium sized enterprises (SMEs) are known for being less prone to international expansion due to the many hazards and challenges that are difficult to face with limited financial and managerial resources. Joint Ventures (JVs) with foreign partners may thus represent strategic weapons for growing internationally, reducing the risks of investments in uncertain environments and allowing access to critical resources not available otherwise. However, due to the high uncertainty of the future behaviour of partners with different national cultures and the complexities related to the entrance in new foreign markets, SMEs usually engage in JVs only at domestic level and are reluctant to engage in such ventures internationally. Drawing on resource dependence and agency theory, we hypothesize and test that the board of directors has an important effect on the willingness to engage in international JVs. Specifically, we found that board interlock ties to other firms increase the likelihood of SMEs to engage in international rather than domestic JVs. Moreover, we found that the positive effect of board interlocks on the formation of international JVs is amplified when there is high ownership concentration. Our study aims to contribute at both theoretical and practitioner level to the literature at bridge between governance and internationalization of SMEs.


SMEs; international joint ventures; board interlocks

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