JultikaUniversity of Oulu repository

Abstract

The purpose of this research is to study the internationalization process of Finnish-based startups and SMEs in emerging Chinese market. More closely, this study intents to reveal certain characteristics that Finnish-based firms possess in the context of motives and entry mode choices on internationalization. Therefore, this research offers no further explanation on the success or failure of internationalization but offers knowledge about the fundamental foundation which firms use to internationalize.

Theoretical framework of this research is based on existing internationalization theories and key concepts regarding international expansion such as entry modes and foreign business culture. Empirical data collection of this research is conducted via qualitative methods in form of a case study within questionnaire and interviews. Primary data consists of 11 case firms without industry-specific limitations. Most of the case firms are newly born and can be addressed as born globals due to their internationalization from inception. Still, there are SMEs with solid domestic market position amongst the case firms. Academic journals, articles and books are observed to provide holistic substance understanding on the research topic.

Findings suggest that extant previous experience on international markets decreases the time-embedded resources on internationalization to China. Aspects concerning China seem to condense on personal and business networks which are valued over the contractual agreements. Finnish-based firms motives for market entry are concerned by the market size and business opportunities. Surprisingly, startups and small enterprises tend to enter the market with high-commitment entry modes and in contrast medium-sized firms enter with low-commitment modes.

Results of this study provide insight on internationalization as a phenomenon and can be used to evaluate the process of Finnish-based startups and SMEs. Because of the lack of limitations on industry-specific features, findings are useful to address internationalization in general, but sector-wise consideration is to be conducted. This research suggests further studies to concentrate on SMEs and startups as individual research targets. These differ highly on their backgrounds and perceived goals on foreign market entry and therefore should be separated from each other. Additionally, more research is needed to explain the importance on trust-based mutual network over the contractual agreements.