Large partners can provide SMEs with valuable knowledge, legitimacy, and network support as they expand internationally. Yet the benefits of asymmetric alliance portfolios have limits: as portfolios grow, governance costs, partner competition, and managerial capacity demands can restrict SMEs’ ability to mobilize these resources. Using a 30-year firm-year panel of Japanese SME trading companies and their equity alliances with business-group-affiliated general trading companies, the authors identify an inverted U-shaped relationship between the number of large partners and FDI entries.
Authors and affiliations:
● Tianyou Hu (University of Macau)
● Andrew Delios (National University of Singapore)
