Decentralization of Public Policies for the Promotion of SMES’ Internationalization. A Theoretical Account

Abstract

SMEs face several obstacles in their internationalization process that they cannot overcome alone, forcing them to remain domestic and, therefore, at a disadvantage in relation to competitors which adopt a more global business perspective. Government action can help SMEs to overcome their limitations, having come to play an increasingly more important role in export promotion, a field where it is normally an aggressive actor. This has led to the view that export promotion programs and agencies are today crucial instruments in supporting SMEs. For these reasons, the formulation of a national strategy of export promotion has been on the agenda of countries throughout the world. Policy decentralization is today a reality, as a reform of the public sector’s model and as a development strategy. From the perspective of decentralization, it has been acknowledged that initiatives should be based on the territory and managed locally, and that the decentralization of power and responsibility to the local level is an important factor in local and regional development. Despite extensive research regarding decentralization, the role of local governments in promoting the internationalization of firms seems to have been rather neglected in the literature, whether in the area of regional science or that of international business. This paper intends to fill this gap, establishing a bridge in the review of the literature on promotion policies for the internationalization, decentralization and internationalization of firms.