Firms behave differently in free trade zones than in confined, domestic markets. To investigate this phenomenon, a taxonomy is developed of small‐ and medium‐sized companies, which operate in the developing North American free trade area. The study describes each firm grouping and its associated performance attributes, and offers theoretical and normative implications. Among other findings, it appears that smaller companies which emphasize entrepreneurial orientation, product differentiation, and focus on specific market segments tend, under free trade, to enjoy superior performance.
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Gary Knight (1997) studied this question.
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