Business Model Innovation in the Internationalization of SMEs: The Role of Causation and Effectuation

Abstract

Small- and medium-sized enterprises (SMEs) undergo different life cycle transitions that affect their business models (BMs) as they seek new to enter foreign markets. Although international entrepreneurship (IE) scholars have recognized the relevance of exploring the creation and growth of entrepreneurial firms, there is a dearth of studies linking how the key decision-makers influence their business model, especially as they pursue internationalization success. This study aims to respond to these gaps in the research by examining the nexus of effectuation and causation (decision logic) and how the combined effects of these logics influence business model innovation (BMI) as SMEs internationalize. In reviewing the existing literature on these concepts, we develop theoretically driven propositions that link business model innovation and decision-making logic in international entrepreneurship that can be subsequently tested with empirical data in the future. This study contributes to the literature on decision-making and business model innovation. It also links two streams of the research, which, to our knowledge, is limited. Moreover, the study is unprecedented in the international entrepreneurship domain.