Social Capital and Indian Micromultinationals

‘Micromultinationals’ are small to medium‐sized enterprises (SMEs) that use higher‐commitment entry modes beyond exporting. The study extends the micromultinational notion by addressing the question: what enables some internationalizing SMEs to become micromultinationals rather than pure exporters? Adopting a connectionist and bonding perspective, its focus is on cross‐border coethnic ties as a valuable source of social capital. A survey of 102 Indian software SMEs indicates that higher stocks of cross‐border coethnic social capital facilitate the adoption of higher‐commitment entry modes by micromultinationals. Also, micromultinationals have a significantly higher degree of internationalization (the percentage of sales from foreign sources) than pure exporters.