Influence of Environmentally Sustainable Practices on the Internationalisation Strategy of Swedish Manufacturing SMEs

Abstract

The purpose of this study is to develop an increased understanding of the influence of environmentally sustainable practices (ESPs) adopted by Swedish manufacturing Small and Medium-sized Enterprises (SMEs) over their internationalisation strategy. A conceptual framework was developed based on existing literature on SMEs sustainability and internationalisation strategy to understand and guide the empirical data collection. The empirical data was collected from four Swedish manufacturing SMEs that actively engaged in ESPs, and a cross-case analysis was conducted. The results show that the manufacturing SMEs prefer to establish their own operations abroad to maintain ESPs. However, resource constraints often lead them to maintain close relationships with partners and locate operations near their home country. Further, manufacturing SMEs with an extensive range of ESPs show higher internationalisation intensity and market choice strategies are influenced by networks, sourcing, supplier availability, and logistics, impacting their ability to maintain ESPs abroad. Moreover, SMEs adopting ESPs from inception exhibit faster internationalisation. These results have implications for practitioners, policymakers, and academia that are interested in SME sustainability and internationalisation.