This study explored the effect of internationalization level on the financial performance of small and medium-sized enterprises (SMEs) and the roles of family ownership stake, foreign investor ownership stake, and institutional investor ownership stake in this relationship. Despite theoretical discussions suggesting that the balance of ownership stakes is important for internationalization level and long-term performance, existing studies have overlooked the role of ownership structure in the relationship between internationalization level and performance. Accordingly, this study developed and tested a research model using 232 internationalized manufacturing SMEs listed on the Korea Stock Exchange from 2003 to 2013, to investigate: (1) how internationalization level affects the financial performance of SMEs, and (2) how the relationship between internationalization level and SME financial performance varies according to ownership structure.

The results showed that internationalization level has a U-shaped curvilinear relationship with SME financial performance, and that family ownership stake, foreign investor ownership stake, and institutional investor ownership stake each positively moderate the U-shaped curvilinear relationship between internationalization level and financial performance. However, in SMEs with high family ownership stakes, increases in foreign investor ownership and institutional investor ownership were found to negatively affect the relationship between internationalization and financial performance. Based on the findings, academic and practical contributions, limitations, and directions for future research were presented.