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

Author

Listed:
  • Desislava Dikova
  • Andreja Jaklic
  • Anze Burger
  • Aliaz Kuncic

    (Institute for International Business/WU Vienna
    Faculty of Social Sciences/University of Ljubliana
    Faculty of Social Sciences/University of Ljubliana
    Economic Development and Globalization Division/United Nations Economic and Social Commission for Western Asia)

Abstract

The question how much internationalization is beneficial for emerging-market small and medium enterprises (EM SMEs) remains challenging 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 economy. 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, and export intensity significantly improve productivity and sales performance for EM SMEs. Furthermore, EM SMEs with complex export strategies enjoy significantly improved productivity and sales performance.

Suggested Citation

  • Desislava Dikova & Andreja Jaklic & Anze Burger & Aliaz Kuncic, 2014. "Export diversity or focus? What strategy is best for first-time internationalizing SMEs from an emerging market?," Working Papers/Institute for International Business iibp1, Institute for International Business.
  • Handle: RePEc:wiw:wiwiib:iibp1
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    Keywords

    first-time exporters; export performance; export diversification;
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