Difficulties and advantages of internationalization in the Hungarian SME sector

With globalization and the technological advancements of the 21st century, more and more organizations are utilizing the advantages of cross-border operations and global value chains. However, despite the fact that the SME sector forms the backbone of the Hungarian economy, the sector often faces difficulties of survival as smaller, only locally operating business are outperformed by large multinational companies flooding the market with more optimal, highly cost-effective supply chains. Research conducted within the Hungarian SME sector shows that internationalized small and medium sized businesses also outperform the only locally operating SMEs. Their performance and employment growth are, on average, higher, and they tend to be more resilient toward environmental difficulties as well. Despite the presumed advantages of internationalization, SMEs are facing critical challenges when it comes to cross-border activities. The aim of this study is to synthesize, on a comprehensive level, the available literature on the Hungarian SME sector and to provide a clear picture on the advantages and difficulties small and medium sized businesses are facing when it comes to foreign operations. The results of the synthetization provide a base for future research aiming to assist small and medium sized enterprises to improve their supply chains and to search for opportunities to easier access foreign markets.

Keywords: SME; internationalization; Hungary; efficiency