Quō vādis de-internationalisation? A typology of de-internationalisation patterns of micro-multinationals (mMNEs) and exporting SMEs during the COVID-19 crisis

Purpose This study explores whether, how and why micro-multinationals (mMNEs) and exporting SMEs de-internationalised during the pandemic. Although the rationale of transaction costs has been introduced to determine why a multinational firm should exist abroad, there is a need to understand the changes in the configuration of value-adding activities in the context of “smaller” firms, which use advanced (beyond exporting or micro-multinational) modes and non-advanced (exporting) modes. Design/methodology/approach Data were collected via semi-structured interviews with 34 top managers and owners of mMNEs and exporting SMEs in Greece during the pandemic. The methodological framework of Gioia was used to analyse the interview transcripts and identify the de-internationalisation themes. Findings This study reveals that de-internationalisation has disrupted the value-adding activities of both mMNEs and exporting SMEs, with varying effects on those value-adding activities. As an initial response, mMNEs make partial adjustments by moving their operations closer to their home markets but still within their home region, while exporting SMEs adopt a near-reshoring strategy. However, depending on their financial situation before the pandemic, some mMNEs and exporting SMEs may bypass these initial steps and jump directly to the subsequent response, either relocating operations entirely back to their home markets or decreasing export intensity abroad, respectively. Originality/value This study theorises the mode of foreign involvement in de-internationalisation, and it shows how the value-adding activities of mMNEs and exporting SMEs react to the COVID-19 crisis, suggesting different patterns of de-internationalisation, a finding that expands the transaction cost theory.