Understanding the pre-internationalization phase decision heuristic of Australian SMEs

Since the 1970s, the Uppsala stages model has been one of the dominant explanations of firm internationalization. The model's focus on internationalization as a firm's gradual and incremental process of increasing international involvement has attracted much debate, with one criticism being that it is unclear in explaining how the internationalization process first originates within a firm. In this paper, the Uppsala model is extended through the incorporation of a pre-internationalization phase to explore the antecedents of firm internationalization. Adopting the Uppsala model's theoretical underpinnings, this paper develops and operationalizes a pre-internationalization phase decision heuristic in the form of an ‘export readiness index'. Four constructs are proposed that drive and inhibit export commencement decision-making during a firm's preinternationalization phase: export stimuli, attitudinal/psychological commitment, resources and lateral rigidity. Through a survey of Australian exporting and non-exporting small-medium sized enterprises (SMEs), the Export Readiness Index (ERI) is developed through factor analysis and tested using logistic regression. Results of the study and their potential implications are discussed.