Commercial diplomacy as a mechanism for passive-reactive SME internationalisation: overcoming liabilities of outsidership

Abstract

This study contributes to SME internationalization literature by conceptualizing commercial diplomacy (CD) as a mechanism, which enables SME internationalization. Specifically, CD provides solutions to remedy for SMEs’ liabilities of outsidership when those SMEs are compelled to internationalize under conditions of abrupt environmental shock in their domestic market. Using the Greek economic crisis triggered in 2008 as a research setting, we examine a situation in which established SMEs previously apathetic to internationalization had to assume the risks of internationalizing or face extinction. With data generated through 35 open-ended semi-structured interviews of commercial diplomats between 2013 and 2017, we conceptualize and empirically validate CD as a missing link in staged and networkrevised theories of internationalization. In doing so, this paper overcomes the current inability of extant SME internationalization literature to account for forced internationalization of established SMEs as a reaction to environmental shocks in which building networks is unfeasible and accessing established networks requires time that these firms do not have.