The relationship between innovation and internationalisation of SMEs: a review of theoretical perspectives

The extant literature on the relationship between innovation and internationalization confronts scholars with two challenges. First, its theoretical grounding is somewhat weak – in particular, the extant scholarship treats innovation and internationalization of small and medium enter- prises (SMEs) with little reference to the theoretical debates in strategy research around the relative salience of resource-based theory, network perspectives and on the linkages between strategy theory and internationalization theory. A second feature of the extant literature is that research is centered on sequential/reciprocal causality between innovation and internationalization (the ‘chicken and egg’ problem). Our review attempts to put theory back into the discussion by coupling a systematic review of the extant literature focused on the main themes and topics to a discussion on the role of theory in the field. We also identify theoretical gaps and make a call for future scholarship to address these gaps.