Export diversity or focus? What strategy is best for first-time internationalizing SMEs from an emerging market?

Desislava Dikova (), Andreja Jaklič (), Anze Burger () and Aljaz Kuncic

No 1, Working Papers/Institute for International Business from WU Vienna University of Economics and Business

Abstract: The question how much internationalization is beneficial for emerging-market small and medium enterprises (EM SMEs) remains challenging to answer for both international business (IB) scholars and managers. We explore export strategies of first time exporters and focus on the scope of EM SMEs internationalization activities. We tackle the question whether more focused or more diversified internationalization through exporting is beneficial for EM SMEs. We examine the impact of foreign market (geographic) diversification, product diversification and export intensity on firm performance of an entire population of EM SMEs from an emerging east European market. In addition, we test whether a complex export strategy-an export strategy of simultaneous product- and geographic export diversification-is beneficial for EM SMEs. We use a panel population data of first time Slovenian exporters in the period 1994-2012. We find that diversified internationalization, both in terms of product and foreign market diversity, significantly improves productivity and sales performance for EM SMEs. Furthermore, EM SMEs with complex export strategies enjoy significantly improved productivity and sales performance.

Keywords: first-time exporters; export performance; diversification (search for similar items in EconPapers)
Date: 2014-06-06
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Working Paper: Export diversity or focus? What strategy is best for first-time internationalizing SMEs from an emerging market? (2014)
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