Internationalization Issues and Export Performance of Manufacturing SMEs in North Western Province, Sri Lanka

Abstract

Small and Medium sized Enterprises (SMEs) plays a major role in the Gross Domestic Product (GDP), providing job opportunities, reducing poverty etc. Even though they have contributing in large to the economy still they are facing number of challenges when internationalizing their businesses. Since this study focused on the factors influence on SMEs internationalizing their businesses. Based on review literature and discussion of expert in the field, four critical factors were identified namely competition, technology, legal requirements and support from the government. Researches received fifty-five questionnaires from the manufacturing Small and Medium sized Enterprise (SME) owners in North Western Province. Fifty completed questionnaires used to measure the effect of four issues on export performance in Sri Lanka. Descriptive statistics, correlation analysis and regression analysis used to analysis data using SPSS. The study reveals that out of four critical factors competition, support from the government showed a positive relationship with performance of internationalized Small and Medium sized Enterprises (SMEs) while technology showed a negative relationship and legal requirements showed no relationship. Among these four critical factors most significant factor was competition. Second most significant factor was support from government and technology; legal requirements were at last. This study will give a big support for Small and Medium sized Enterprise (SME) owners, policy makers, researchers and etc. Policy makers and government should encourage internationalization of SMEs to achieve higher performance and give big contribution to the country. Further research needs to conduct on SME internationalization and their issues with massive sample covering both manufacturing and service industries.