Slack, Innovation, and Export Intensity: Implications for Small- and Medium-Sized Enterprises

Despite the acknowledged importance of resources to small- and medium-sized enterprise (SME) internationalization, scholars have largely focused on the absolute level of resources rather than excess resources. Drawing on behavioral theory and literature on SME internationalization, we argue that SMEs intensify exports when pressured to find a way to survive at low levels of resource slack or when adequately prepared at high levels of slack. In contrast, moderate levels of slack result in a domestic focus by SMEs. We also suggest that for highly innovative SMEs, this pattern of effects changes. Analyses performed on a cross-country sample of 3,280 SMEs confirm our hypotheses.