The effect of outward and inward internationalisation on different types of innovation: Evidence from UK SMEs

Bochra Idris, George Saridakis, Zaheer Khan

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This paper empirically examines the effect of outward internationalisation, inward internationalisation activities and outward-inward internationalisation (i.e., exporting and importing) on different types of innovation undertaken by UK SMEs. Specifically, we differentiate between product innovation and process innovation and examine the potential effect that they can generate individually and in combination. The results show that both inward and outward internationalisation support product and process innovation in SMEs. However, such an effect is found to be stronger for the combined outward-inward internationalisation operations than for the single mode undertaken by SMEs. The results are found to be robust across the different types of innovation. However, sub-sample analysis shows that, although innovation responds to different internationalisation operations in micro and small firms, for medium-sized firms, only the combination of outward and inward internationalisation operations increases the probability of undertaking both innovations. Using the organisational learning theory, we argue that engaging in both internationalisation activities simultaneously enables firms to acquire a more diverse and richer set of knowledge and key information — through double loop learning, which is translated into increased levels of innovation. Hence, our results have important theoretical, managerial, and policy implications and stimulate the existing debate in the area.
Original languageEnglish
Article number100903
JournalJournal of International Management
Issue number2
Early online date26 Nov 2021
Publication statusPublished - Jun 2022

Bibliographical note

© 2021, Elsevier. Licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International


  • Innovation
  • Inward internationalisation
  • Learning
  • Outward internationalisation
  • Process innovation
  • Product innovation
  • SMEs


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  • Best Paper Award

    Idris, Bochra (Recipient), Saridakis, George (Recipient) & Khan, Zaheer (Recipient), 14 Nov 2019

    Prize: Prize (including medals and awards)

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