The Role of Political Intelligence in Firms’ Export Decisions During the Euro Crisis

Abstract

Inspired by the literatures on internationalization and absorptive capacity, we develop a model exploring how small firms—during crises—acquire and apply political information to export decisions. We test our model using data collected during the 2012 Eurozone crisis from a sample of 440 British, French, and Swedish SMEs. Findings indicate that firms dependent on the Eurozone for exports and heavily impacted by the crisis engaged in frequent political monitoring. In turn, frequent monitoring leads to the development of formal routines for exploiting political information. Firms with the most formal routines sought new export opportunities beyond the Eurozone. In contrast to previous research into small‐firm internationalization, our study stresses the significance of “shortcut” searching activities, non‐market information, and firms’ decisions to reduce prior investments in export markets.

Notes

1 ANOVA test of means by country of the endogenous variables in our model (monitoring frequencies, formality of information exploitation, and export diversification intention) shows that there are no significant differences in export diversification intention (p > .1); UK firms report the highest level of formality of information exploitation (p = .02); there are significant differences in the monitoring frequency across the countries at p < .00: UK respondents used private sources of political intelligence more frequently than their French and Swedish counterparts, and French respondents used private sources the least.

2 We thank an anonymous reviewer for raising this point.

Additional information

Notes on contributors

Andrew Barron

Andrew Barron is Associate Professor in the Department of Marketing/International Business at University of Toulouse/Toulouse Business School.

Peter Hultén

Peter Hultéen is Associate Professor in the Department ofMarketing at the Umeå School of Business and Economics.

Vladimir Vanyushyn

Vladimir Vanyushyn is Associate Professor in the Department of Marketing at the Umeå School of Business and Economics.