A Bird in the hand is worth two in the bush: How SMEs leverage different types of knowledge and networks during effectual internationalization

Internationalization literature uncritically treats different networks and knowledge as having the same impact on strategy and performance. Recognizing the need to approach these concepts in a more sophisticated way and inspired by Effectuation’s Bird-in-hand principle, we posit that internationalization knowledge, customer network knowledge, and supplier network knowledge influence performance while mediated by a non-predictive strategy. We combine six hypotheses in a structural model that we test on a sample of 851 SMEs from Brazil, China, Italy, Poland, and Sweden. The analysis supports the idea that non-predictive strategy mediates positive relationships between internationalization knowledge and supplier network knowledge, on the one side, and performance, on the other. The indirect relationship involving internationalization knowledge is stronger for SMEs in developed countries, but supplier network knowledge does not differ across groups. The analysis does not support the importance of customer network knowledge. We discuss theoretical and managerial implications of these findings.