Growing Pains: New Zealand Qualitative Evidence on Hurdles to Exporting Growth
AbstractThis paper surveys qualitative evidence with the aim of identifying consistent issues surrounding the growth of New Zealand firms. The available literature is focussed on exporters and raises the possibility of two “hurdles” to growth for New Zealand firms. The first is the fixed-cost hurdle to entering exporting. The second is the hurdle of establishing the offshore distribution channels required for continued growth. While the evidence for these hurdles is far from conclusive, their existence is consistent with many of the available case studies. The hurdle to ongoing growth may explain why so many promising New Zealand companies are sold to foreign firms in the same industry. Overseas ownership by a firm in the same industry often solves the distribution problems of many small New Zealand firms and allows growth to continue. The outcome of overseas ownership is therefore not necessarily bad for New Zealand. The case study evidence suggests many plausible causes of these hurdles. These include New Zealand’s small market size and distant location and the fluctuating exchange rate. While the evidence on capital markets is mixed, case studies suggest a possible lack of specialised expertise on the part of New Zealand’s small venture capital industry may also be a hurdle to growth.
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Bibliographic InfoPaper provided by New Zealand Treasury in its series Treasury Working Paper Series with number 02/10.
Length: 39 pages
Date of creation: Jun 2002
Date of revision:
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Patterns of Firm Growth; Exporting;
Find related papers by JEL classification:
- D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
- F14 - International Economics - - Trade - - - Empirical Studies of Trade
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- Richard Fabling & Lynda Sanderson, 2009. "Entrepreneurship and aggregate merchandise trade growth in New Zealand," Reserve Bank of New Zealand Discussion Paper Series DP2009/09, Reserve Bank of New Zealand.
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