Abstract: This study empirically test the relationship between ties and internationalization of SMEs from the perspective of Guanxi theory. We first decompose ties as political ties and business ties, and then further divide political ties into host country and local political ties, business ties into host country and local business ties for the aim to find the very ties influencing internationalization. We find that: there exists positive correlation between general ties and internationalization; political ties are positively related to internationalization and opposite to business ties; host country political ties and host country business ties are both positively correlated with internationalization, local business ties are negatively related to internationalization, and local political ties has no effect on internationalization. The positive effect of host country political ties is greater than that of local political ties, and the negative effect of local business ties exceeds the positive effect of its counterpart. Media comment has mediation effect on the relationship between ties and internationalization. Government support positively influences internationalization and moderates the relationships between ties and internationalization by reinforcing the effect of ties. The conclusion helps SMEs invest reasonably in guanxi resource, and is beneficial for government on policy making.
Keywords: Ties, Political Ties, Business Ties, Media Comments, Internationalization
source:Finance & Trade Economics ,No8,2013