The human factor: Investments in employee human capital, productivity, and SME internationalization

Abstract

Internationalization offers many strategic benefits to SMEs, but is not easy to accomplish. In contrast to much of the work on SME internationalization, which focuses on the role of the entrepreneur in the internationalization process, the premise of this study is that in SMEs, the investment in the human capital of the entire organization pays off when it is carefully calibrated with the chosen internationalization strategy. We find that firm-level investments in employee human capital are critical for the labor productivity and internationalization in fast internationalizers, but not for those firms that internationalize more slowly.