Decision-makers' Risk Perception in the Internationalisation of Small and Medium-Sized Firms

This study examines the risk perception of decision-makers in small and medium sized enterprises (SMEs) and the factors underlying these perceptions in the process of internationalization of their firms. While risk perception has been identified as a potential predictor variable in internationalisation research, very little work has been done exploring the factors and processes that shape decision-makers’ perception of risk. A qualitative interview-based approach was adopted by collecting data from thirty-two Danish SMEs operating in four different industries. Findings suggest that while risk awareness exists, decision-makers do not perceive internationalisation as risky behaviour. Findings highlight the importance of decision-makers’ background, including cognitive and psychological characteristics, such as self-efficacy and locus of control, and their experiences in explaining risk perceptions associated with firm internationalisation.