Strategic factors in SME leadership orientation towards initiating exports: India context

What the paper says

Purpose This paper aims to examine characteristics of emerging market small and medium-sized enterprise (SME) decision makers in their entry to exporting. What prior experience is significantly related to an export orientation? How influential are factors that would both aid and inhibit exports? What about the decision to not initiate exporting. Design/methodology/approach In total, 319 surveys were collected from managers in South India for quantitative and qualitative analysis. Structural equation modelling was used to test the model. Findings Fluency in English was the only significant managerial characteristic associated with a positive perception of export benefits. Education and export experience were not significant strategic factors. SMEs who only serve their domestic market were not averse to exporting but were satisfied with the performance of their home markets. Once deciding to export, use of export intermediaries helped them to move towards presence in multiple markets. None of the inhibiting costs or constraints involved with exporting, other than labour, transportation differentials and export controls, were significantly influential in the export decision process. However, exports were favourably influenced by perceptions of the firms’ quality, pricing, selection and business relationships. Practical implications The value of export intermediaries and government agencies is clearly indicated from this study. Such providers could use these findings to target decision makers and assist in overcoming objections to branching out beyond a domestic-only strategy. One strategy option is to establish a strong market presence in the home state and then “export” to adjoining states. The findings might be generalised to other emerging markets as well. Originality/value Export entry decision-making is an under-researched area in emerging markets.