Factors Influencing on Export Engagement of Small and Medium-Sized Enterprises in Sri Lanka: Resource Based View

Abstract

Purpose: Sri Lankan government has recognized small and medium enterprises (SMEs) as the backbone of the economy. Export is the most adapted internationalization mechanism by SMEs. Export activities of SMEs are caused to reduce trade balance deficit, increase capital inflow, increase employment, create balance of payment surplus and increase the production. In the most of the developing countries, considerable amount of total export activities is performed by SMEs. However, a few numbers of SMEs are exporting in Sri Lanka. The purpose of this study is to identify the factors that influence on export engagement of SMEs in Sri Lanka. Methods: Explanatory research approach followed by quantitative method used in this study. Based on literature, financial capability, management capability, government policy and marketing information were selected as influencing factors on export engagement of SMEs. Scope of the study consisted with SMEs in the manufacturing sector, located in Western province. A structured questionnaire was used for the primary data collection. Findings: The survey was conducted on 151 SMEs. The multiple regression analysis results revealed that 72.6% of the variation in export engagement can be explained by financial capability, management capabilities and government policies. However, marketing information was not a significant determinant of export engagement of SMEs. Among the factors, management capability recorded the highest beta value (beta = 0.487) followed by financial capabilities.  Research Implications: This study helps to enhance the development of the country through assisting the SMEs to enhance their exports by having a better understand about the factors influence for export engagement of SMEs. The SMEs which are not engaged with export, can get a knowledge about the most important factors of the export-engaged enterprises have. Further Study Suggestions: Future studies might concern in depth analysis of problems face by SMEs when engaging with exports and remedies for those problems by using many sample size within a long period of time.