An analytical review of the factors stimulating smaller firms to export: Implications for policy‐makers

Although exporting can offer many benefits to smaller manufacturers, a large number of these firms refrain from export operations as a result of insufficient stimulation. This paper seeks to critically analyse and creatively synthesise the reasons that may stimulate a smaller firm to export, based on a review of 32 empirical studies conducted in various parts of the world during the period 1974‐2005.

A total of 40 export stimuli were systematically identified from the extant empirical literature, which, for analytical purposes, were divided into internal and external, as well as proactive and reactive. Within each study, stimuli were ranked in terms of their importance, frequency, or intensity, and the aggregate impact of each stimulus in all studies under review was evaluated.

The review revealed that export stimulation stems from a variety of factors, and may vary according to time, spatial, and industry contexts. Irrespective of contextual factors, there are certain motives that systematically play a key role in encouraging smaller firms to export, such as the desire to achieve extra sales, profits, and growth, utilise better idle production capacity, exploit a unique/patented product, avoid the threats of a saturated domestic market, reduce home market dependence, and respond to unsolicited orders from abroad. Some of these motives may lead to an opportunistic approach to exporting, while others denote deliberate export adoption. It was also shown that, although there are numerous other stimulating factors, with a lower impact on exporting, these should not be underestimated because their role may increase under certain conditions or become complementary to export stimuli with a stronger impact.

The findings of the study have serious implications for both public and company policy makers. Policy makers may use this insightful analysis of export stimulation as a guide to developing proper export promotion programmes and sound export marketing strategies.

The paper offers a comprehensive review and synthesis of all factors with a possible stimulating effect on exporting; evaluates the aggregate effect of each factor, as collectively derived from all empirical studies conducted on the subject; and provides an in‐depth analysis of the nature and the stimulating mechanism of each factor.