Motivators of SME initial export choice and the European Union regional effect in manufacturing

Abstract

Purpose

A global reach in exporting has been linked to profitability. The purpose of this paper is to answer the influence of EU regulations on exporting decisions of UK manufacturing small- and medium-sized firms (SMEs) by investigating the home and host country-based motivators behind SMEs’ choice to export, and export regionally, within the EU.

Design/methodology/approach

Contrasting the Uppsala and resource-based view perspectives (using a sample of UK independent manufacturing SMEs and utilizing a survey, correlation analysis and factor analysis), the paper finds and describes the effect of the most recurrent motivators from the literature on the SMEs’ decision to export within the EU or not.

Findings

The paper finds that SMEs whose latest international market entry was not in the EU scored significantly higher in the factor scorings for the motivators in the external dimension than participants whose latest entry was in the EU. Several motivators show an association with the choice to export per se. The importance of regionalization to export initiation (and EU membership) within the EU is emphasized in the results.

Research limitations/implications

The sample size is limited.

Practical implications

In the current climate, how can SMEs reduce market research costs for managers by relying solely and proactively on home country and internal advantages and motivators and being more aware of their surroundings? Managers and policymakers can direct their strategy, resources and policy more efficiently according to motivators; internal home country motivators (e.g. strengths of prices of products) direct the SME to overcome inter-regional liability of foreignness, while host country motivators (e.g. legal restrictions in the host country) direct them to regional ventures.

Originality/value

The theoretical and empirical work on the topic, until recently, has been fragmented and inconsistent focusing on specific motivators but not necessarily justifying the selection or origin of variables even less on SMEs.

Citation

Stouraitis, V., Mior Harun, M.H. and Kyritsis, M. (2017), "Motivators of SME initial export choice and the European Union regional effect in manufacturing", International Journal of Entrepreneurial Behavior & Research, Vol. 23 No. 1, pp. 35-55. https://doi.org/10.1108/IJEBR-05-2015-0120