Social Ties Driving Internationalization for SMEs from Azores Islands, Portugal

Social Ties Driving Internationalization for SMEs from Azores Islands, Portugal

A recent study of a small fish exporter from the Azores Islands, an autonomous Portuguese archipelago in the North Atlantic, some 900 miles from the European mainland, offers useful insights on the key drivers of internationalization for companies based on small islands. It illustrates the critical role of social ties in guiding and supporting island-based SMEs towards successful internationalization. Often challenged by „isolation‟ and distance from the core economies, and by dis-economies of scale and high transportation cost, these SMEs from small islands tend to exhibit relatively low international involvement. The resultant economic weakness associated with such islands often fuels emigration. In the case of the small fish exporter from the Azores Islands investigated by Camara and Simeos (2008), this meant access to major emigrant communities in Canada (British Columbia and Quebec) and the United States (California, Hawaii, Massachusetts, and Rhode Island) among others. There is evidence, however, that some island-based SMEs leverage the network of family and social ties existing between those remaining on the islands and those that emigrated to compete in international markets.
Source: Camara and Simeos (2008)

Internationalization

internationalization and international entrepreneurship among small and medium-sized enterprises (SMEs) has remained a topic of considerable contemporary relevance, principally owing to the observed growth effects of cross-border venturing, and the demonstrated capacity of SMEs to drive economic development at national, regional, and global levels (European Commission, 2007). This realisation was at the heart of the 2007 OECD-APEC study on Removing Barriers to SME Access to International Markets, which provided general findings on the major barriers to SME internationalization as perceived by SMEs and policymakers in OECD and APEC member economies.1 The need to obtain a greater depth of understanding and an updated view of the issues raised by the OECD-APEC study provided a raison d'être for this follow-up project. Other value adding features include the additional focus on motivations for SME internationalization ; the coverage of recently available documentation from economies involved in the OECD enlargement (Chile, Estonia, Israel, Russia, and Slovenia) and enhanced engagement process (Brazil, China, India, Indonesia, and South Africa); and the sub-national and sectoral insights offered on SME internationalization barriers, motivations and support programs.

The big questions for many managers: Should you get off the plane?

In some cases, these risks can impact the subsidiary organization's directors, officers and managers. In others, executives from the home territory may be at risk: Some have even been known to question if they should get off the plane in countries in which their company's subsidiary may be involved in a legal tangle, she says. To avoid potential problems, Colwell tells executives to consider D&O coverage for offshore subsidiaries placed by the corporate headquarters, or as local laws require, placed in the subsidiary's country. An important consideration for buyers is to make sure the company's D&O broker has access to partner brokers abroad. "We need insurance policies and programs that can adapt to various indemnification scenarios, so that individuals are protected in all jurisdictions." Hartmut Mai, the Global Head of Financial Lines at Allianz Global Corporate & Specialty, a major provider of D&O insurance, says policies used to have global reach but are now increasingly subject to local regulations. He recommends one-stop shopping for D&O coverage at larger insurance providers that can meet needs in all territories and advise on peculiarities. Mai also advises that managers who are trying to steer their company's D&O program insist on close contact with insurers to foster a mutual understanding of risk exposure. "Keeping in constant communication is not just good for underwriters, it's also good for the client because the client begins to understand how the underwriter thinks and what he is looking for in the risk assessment process," says Mai. David Walters, who manages the commercial D&O business of Chartis Insurance in the UK and Ireland, a part of the former AIG and one of the world's largest D&O insurers, also recommends that companies communicate frequently with their insurance brokers and insurers about business developments that could potentially change a company's risk profile.

According to Walters, companies should treat their D&O providers just like one of their stockholders—and for good reason: "At the point of crisis, if the communication has been two-way and open, a solid relationship would be in place to back up the claims process."

More about International Tax

Cash shells in the Plus Markets Exchange in London

The PLUS Markets is a London based stock exchange aimed at small and mid-cap companies looking to raise capital and gain international exposure with a flexible regulatory environment compared to the traditional capital markets.

PLUS offers the same advantages of AIM such as the ability to raise funds, increase company profile and tax advantages for investors but with the added benefits of lower costs and a more flexible regulatory regime.

Cash shells are companies with a stock market quote, board of directors and money in the bank but no active business.

Generally set up as an „investment vehicle‟, the entrepreneurs and shareholders of a cash shell are looking for a business to fund.

Rather than going through the traditional Initial Public Offering (IPO), a company looking for capital is „acquired‟ by a cash shell, known as a „reverse takeover‟. A reverse takeover can be a quicker and more certain route to a public quotation compared to a standard IPO with the added benefit of a known quantity of available capital.

you can find more information about the Plus Markets Exchange on:

http://www.Braxton-co.com