Source: Canadian Journal of Administrative Sciences, 21(1) (2004): 22–34. 1 International Activities in Small Firms: Examining Factors Influencing the Internationalization and Export Growth of Small Firms Svante Andersson, Jonas Gabrielsson and Ingemar Wictor S mall firms are becoming increasingly international. Small firms are reported to contribute 25 to 35% of world exports of manufacturers, and about one- fifth of manufacturing small firms receive between 10 and 40% of their turnover from cross-border activities (OECD, 2000). Moreover, small firms seem to get into the international scene at a much earlier age than before, and they are also more actively pursuing strategies that involve international activities (Knight, 1997; McDougall & Oviatt, 2000; McDougall, Shane, & Oviatt, 1994; Reynolds, 1997). These internationally active small firms also tend to grow faster than their domestic equivalents. The international activities of small firms are consequently attracting growing interest from scholars interested in internationalization, entre- preneurship, and small business growth. Previous conceptualization and empirical research on firm internationalization has been heavily focused on large multinational enterprises and these models have been used as the lens for understanding firm internationalization in other empirical settings (Ibeh, 2000). An influential theoretical starting point to explain firms’ international development has been different types of stage and process models (Bilkey & Tesar, 1977; Cavusgil, 1980; Johansson & Vahlne, 1977, 1990; Reid, 1981). A basic assumption in these models is that firms internationalize in an incremental, stepwise, and gradual process for gaining increased experiential knowledge and reduced risk (Johanson & Vahlne, 1990; Loustarinen, 1979). According to the Uppsala School of Internationalization (Johanssson & Vahlne, 1977, 1990), firms begin with their home markets and then gradually internationalize in a stepwise manner. This means that the organization slowly builds up its knowledge regarding foreign cultures, languages, political systems, level of industrial development and so on (Johanson & Wiedersheim-Paul, 1975). The gradual stage model of a firm’s international development has been criti- cized from various angles and numerous studies point out that the stage models may not be fully able to explain the internationalization of small firms in today’s global markets (Andersen, 1993; Andersson, 2000; Bell, 1995; Crick & Jones, 2000; Knight, 1997; McDougall et al., 1994). A study of Australia’s high exporters, for