A Three-Stage Model of Exporting: New Insights into SMEs’ Internationalization- Performance Relationship
Silvia Cantele, PhD; Bettina Campedelli; Demetris Vrontis, PhD

Abstract
The article presents the results of an empirical analysis on the relationship between exporting and profitability in a sample of 1,231 manufacturing SMEs. A sigmoid relationship between the degree of internationalization, measured by Export Sales Ratio (ESR), and the profitability of the firms (measured by Return on Sales, ROS) is hypothesized. The results indicate that exporting can be beneficial to SMEs, but only in the second stage of the process, when a certain degree of international commitment is achieved. In the first and in the third stage, when the incidence of sales internationalization is respectively lower and higher, the incremental costs of exporting exceed the related benefits, determining a declining performance. This research contributes to existent literature by deepening the internationalization and performance (I&P) relationship within a context of exporting small and medium enterprises.

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