Academic journal article International Journal of Management and Marketing Research

Export Inhibitors in the First Stage of the Internationalization Process: Evidence from Mexico

Academic journal article International Journal of Management and Marketing Research

Export Inhibitors in the First Stage of the Internationalization Process: Evidence from Mexico

Article excerpt

INTRODUCTION

Exports offer significant opportunities for growth to SMEs. SMEs can respond to opportunities to expanding its market, or address problems it may face in the domestic market. However, this is an activity that is not being developed by all manufacturing SMEs in Mexico. Only 6.7% of existing companies have export activities, a figure that falls to 5% in the state of Michoacán. For this reason the present investigation examines problems these companies have with exports. It is often the case that difficulties encountered by firms keep them from achieving their international goals or inhibiting their will to participate in export activities.

The issues surrounding exportation have been studied in various countries and with different kinds of companies. Understanding the relevant issues may help determine the reason why many companies are not able to export or incur financial losses, or why exporting companies are unable to exploit their potential to the fullest (Leonidou, 1995). Previous studies have shown that some barriers are created within the company and are generally associated with resources at the organization's disposal or with the approach given to marketing of exports. Others stem from external circumstances both in their own countries and in the countries they are trying to reach (Leonidou, 1995; Fillis, 2002; Smith, Gregoire & Lu, 2006). These problems appear at any stage of the companies' internationalization process and can be different from one company to the next (Kedia & Chhokar, 1986; Leonidou, 1995; Smith et al., 2006). But, they can also have different effects on companies that find themselves in the same stage of the internationalization process (Pinho & Martins, 2010) or in the same industry (Tesfom, Lutzb & Ghauric, 2006).

Internationalization has been studied extensively. However, a considerable number of the studies consulted contemplated the same variables, methodology and measuring tools for both exporting and non-exporting companies. The results show that these problems affect each group differently (Kedia & Chhokar, 1986; Moini, 1997; Smith, et al., 2006; Pinho & Martins, 2010). This study, therefore, joins the existing literature on the subject and finds which export inhibitors in the first stage of the companies' internationalization process has the strongest impact on manufacturing SMEs in the state of Michoacán. For that reason, this research focuses solely on inhibitors faced by non-exporting companies. Consequently the methodology, measurement tools and variables are used only on SMEs which do not export, leaving aside any issues that may be faced by exporting companies. I do this because it has been mentioned in Michoacán that 95% of manufacturing SMEs do not have export activities, which makes it crucial to identify the relevant characteristics of these companies.

This work is initially composed of a review of the literature in which the first stage of the companies' internationalization process and the problems and inhibitors for exports affecting non-exporting companies are addressed. Next, there will be an analysis of the methodology used, followed by the results of field work which will gives place to the discussion. The paper closes with some concluding comments.

LITERATURE REVIEW

First Stage of the Internationalization Process of Companies

Johanson and Wiedersheim-Paul (1975) are credited as the first to carry out studies on the internationalization process of companies. Their model has four sequential stages where the resources and the commitment to foreign markets are increased as more experience in international commerce is gained. However, they do not mention why companies decide to go international and how the process begins (since the companies which were the subject of their study already took part in export activities). Additionally, they do not discuss factors which may influence this process (Andersen, 1993). …

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