Factors influencing SMEs' engagement in direct exporting activities

Abstract

The benefits of trade liberalisation are not shared equally among countries and enterprises across the globe. Small and Medium-sized Enterprises (SMEs) in developing countries are less able to participate in export market than their large counterparts despite various export assistance provision by the government. This study aims to investigate the factors influencing Indonesian SMEs’ decision and ability to engage in direct exporting activities. The evidences were collected from 271 exporting SMEs and 226 non-exporting SMEs in seven provinces in Jawa, Madura, and Bali regions. Logistic regressions were used to identify the distinct characteristics of exporting SMEs. The findings show that the exporters differ from non-exporters in firm and owner characteristics, perceived export barriers, participation in government export assistances and network relationships. The policy and managerial implications of the findings are discussed.