The relationship between internationalization and innovation in SMEs: The case of Slovenia

Abstract

The paper analyzes the relationship between internationalization and innovation in small and medium-sized enterprises (SMEs). Based on the literature, we developed two main hypotheses to examine differences in innovation between internationalized and noninternationalized Slovenian SMEs, and the impact of a direct interaction between different levels of innovation and the degree of internationalization of SMEs. The results of the survey among 247 Slovenian SMEs have shown that companies, which are involved in international activities, are more innovative than those that focus only on the national market (H1). We have just partly confirmed H2, that SMEs in Slovenia, which are more innovative, are also more internationalized. For analyzes and hypotheses confirmation, factor analysis, and regression analysis have been used.