SAM ADVANCED MANAGEMENT JOURNAL

Barriers to Internationalization: An Examination of Export Barriers Facing Small and Medium-Sized Enterprises in Nigeria

John O. Okpara, Jet Mboga, and Weichun Zhu

DOI:

Citation: Okpara, J.O., Mboga, J. & Zhu, W. (2023). Barriers to internationalization: An examination of export barriers facing small and medium-sized enterprises in Nigeria. SAM Advanced Management Journal, 88(2),47-63.

Abstract

Small and medium-sized enterprises (SMEs)have been recognized as the engine of economic growth for any economy. They are vibrant and innovative, and their small size allows them to make swift decisions. As they attempt to internationalize, they face substantial barriers. Our literature review shows that little research has been done on this topic in Africa, particularly in Nigeria. Therefore, there is a knowledge gap in our understanding of this important topic in Nigeria. This study is an attempt to bridge that gap and increase our understanding of the barriers that hinder the export development of SMEs in Nigeria. For many SMEs in Nigeria, identifying the factors that hinder their ability to export is the essential first step toward finding solutions to the problems. Therefore, the purpose of this study is to examine export barriers facing SMEs in Nigeria on their path to internationalization. We collected data from 112 Nigerian-based manufacturing firms through a questionnaire. Our findings show that the major barriers to export development in Nigeria include a lack of financing to support export activities, a lack of qualified personnel to support export planning, foreign competition, a lack of knowledge about exporting, and a lack of government assistance and incentives. Finally, we discuss the implications of the findings.

References

Babbie, E. R. (1990). Survey research methods. Belmont: Wadsworth Publishing Company.

Baker, P., Moon, N. W., & Ward, A. (2006). Virtual exclusion and telework: Barriers and opportunities of technocentric workplace accommodation policy. PubMed, 27(4), 421–430.

Bartel, C. A., Wrzesniewski, A., & Wiesenfeld, B. M. (2012). Knowing where you stand: Physical isolation, perceived respect, and organizational identification among virtual employees. Organization Science, 23(3), 743–757. https://doi.org/10.1287/orsc.1110.0661

Bilkey, W. J. (1978). An attempted integration of the literature on the export behavior of firms. Journal of International Business Studies, 9(1), 33–46. https://doi.org/10.1057/palgrave.jibs.8490649

Bilkey, W. J., & Tesar, G. (1977). The export behavior of smaller-sized Wisconsin manufacturing firms. Journal of International Business Studies, 8(1), 93–98. https://doi.org/10.1057/palgrave.jibs.8490783

Cateora, P. R., Graham, J., & Gilly, M. (2022). International Marketing. New York: McGraw-Hill Education.

Cavusgil, S. T. (1984). Organizational characteristics associated with export activity. Journal of Management Studies, 21(1), 3–22. https://doi.org/10.1111/j.1467-6486.1984.tb00222.x

Cavusgil, S. T., & Boddewyn, J. J. (1985). International marketing: Review and research agenda. Working Paper.

Cavusgil, S. T., Czinkota, M. R., & Tesar, G. (1982). Some observations on the relevance of critical variables for internationalization stages in export management: An international context. New York: Praeger.

Central Intelligence Agency. (2022). Nigeria – The world factbook. Retrieved from www.cia.gov website: https://www.cia.gov/the-world-factbook/countries/nigeria/

Chandra, A. A., Paul, J., & Chavan, M. (2021). Internationalization challenges for smes: Evidence and theoretical extension. European Business Review, 33(2), 316–344. https://doi.org/10.1108/ebr-08-2019-0164

Chandra, A., Paul, J., & Chavan, M. (2020). Internationalization barriers of smes from developing countries: A review and research agenda. International Journal of Entrepreneurial Behavior & Research, 26(6), 1281–1310. https://doi.org/10.1108/ijebr-03-2020-0167

DeSilver, D. (2020). Before the coronavirus, telework was an optional benefit, mostly for the affluent few. Retrieved from Pew Research Center website: https://www.pewresearch.org/short-reads/2020/03/20/before-the-coronavirus-telework-was-an-optional-benefit-mostly-for-the-affluent-few/

Fishbein, M., & Ajzen, I. (1975). Belief, attitude, intention and behaviour: An introduction to theory and research. Reading: Addison-Wesley.

Ibeh, K. I. N. (2004). Furthering export participation in less performing developing countries. International Journal of Social Economics, 31(1/2), 94–110. https://doi.org/10.1108/03068290410515448

Katsikeas, C. S., & Morgan, R. E. (1994). Differences in perceptions of exporting problems based on firm size and export market experience. European Journal of Marketing, 28(5), 17–35. https://doi.org/10.1108/03090569410062014

Khattak, J. K., Arslan, M., & Umair, M. (2011). SMEs’ export problems in Pakistan. Journal of Business Management, 2(5), 192–199.

Leonidou, L. C. (1995). Empirical research on export barriers: Review, assessment, and synthesis. Journal of International Marketing, 3(1), 29–43. https://doi.org/10.1177/1069031×9500300103

Leonidou, L. C. (2004). An analysis of the barriers hindering small business export development. Journal of Small Business Management, 42(3), 279–302. https://doi.org/10.1111/j.1540-627x.2004.00112.x

Leonidou, L. C., Katsikeas, C. S., & Piercy, N. F. (1998). Identifying managerial influences on exporting: Past research and future directions. Journal of International Marketing, 6(2), 74–102. https://doi.org/10.1177/1069031×9800600209

Martín, O. M., Chetty, S., & Bai, W. (2021). Foreign market entry knowledge and international performance: The mediating role of international market selection and network capability. Journal of World Business, 57(2), 101266. Sciencedirect. https://doi.org/10.1016/j.jwb.2021.101266

Michael, J. T., & Araujo, L. (1985). Theories of export behaviour: A critical analysis. European Journal of Marketing, 19(2), 42–52. https://doi.org/10.1108/eum0000000004751

Nachmias, C., & Nachmias, D. (1992). Research methods in the social sciences (4th ed.). New York: St. Martin’s Press.

Narayanan, V. (2015). Export barriers for small and medium-sized enterprises: A literature review based on leonidou’s model. Entrepreneurial Business and Economics Review, 3(2), 105–123. https://doi.org/10.15678/eber.2015.030208

Niittymies, A., & Pajunen, K. (2020). Cognitive foundations of firm internationalization: A systematic review and agenda for future research. International Business Review, 29(4), 1–22. https://doi.org/10.1016/j.ibusrev.2019.101654

OECD. (2009). Top barriers and drivers to SME internationalization. OECD Working Party on SMEs and Entrepreneurship.

OECD. (2017). Enhancing the contributions of smes in a global and digitalized economy. OECD. Retrieved from OECD website: https://www.oecd.org/industry/C-MIN-2017-8-EN.pdf

OECD. (2022). Glossary for barriers to SME access to international markets. Retrieved from OECD website: https://www.oecd.org/cfe/smes/glossaryforbarrierstosmeaccesstointernationalmarkets.htm

Okpara, J. O., & Kabongo, J. D. (2010). Export barriers and internationalisation: Evidence from SMEs in an emergent African economy. International Journal of Business and Globalisation, 5(2), 169. https://doi.org/10.1504/ijbg.2010.034394

Okpara, J. O., & Wynn, P. (2007). Determinants of small business growth constraints in a sub-saharan African economy. S.A.M. Advanced Management Journal, 72(2), 24–35.

Pinho, J. C., & Martins, L. (2010). Exporting barriers: Insights from Portuguese small- and medium-sized exporters and non-exporters. Journal of International Entrepreneurship, 8(3), 254–272. https://doi.org/10.1007/s10843-010-0046-x

Pluye, P., Robert, E., Cargo, M., Bartlett, G., O’Cathain, A., Griffiths, F., … Rousseau, M. C. (2011). Proposal: a mixed methods appraisal tool for systematic mixed studies reviews – ScienceOpen. Retrieved from Annual Review of Public Health website: https://www.scienceopen.com/document?vid=feb74b8c-08fd-4b8c-ad08-65f7c2b8108e

Revindo, M. D. (2017). Types and severities of export barriers: Evidence from indonesian smes. Economics and Finance in Indonesia, 63(2), 150–175. https://doi.org/10.7454/efi.v63i2.573

Roy, A., Sekhar, C., & Vyas, V. (2016). Barriers to internationalization: A study of small and medium enterprises in India. Journal of International Entrepreneurship, 14(4), 513–538. https://doi.org/10.1007/s10843-016-0187-7

Sibanda, K., Hove-Sibanda, P., & Shava, H. (2018). The impact of SME access to finance and performance on exporting behaviour at firm level: A case of furniture manufacturing SMEs in Zimbabwe. Acta Commercii, 18(1). https://doi.org/10.4102/ac.v18i1.554

Su¡rez-Ortega, S. (2003). Export barriers. International Small Business Journal: Researching Entrepreneurship, 21(4), 403–419. https://doi.org/10.1177/02662426030214002

Wasowska, A. (2016). Perception of export barriers at different stages of the         internationalization process: Evidence from european smes. Journal of Entrepreneurship Management and Innovation, 12(4), 29–50. Retrieved from https://jemi.edu.pl/vol-12-issue-4-2016/percepton-of-export-barriers-at-di-erent-stages-of-the-internatonalizaton-process-evidence-from-european-smes

Zeleke, W. K. (2020). Assessment of barriers to small and medium enterprises from engaging in export business in case of mekelle city, ethiopia. Journal of Economics and Sustainable Development, 11(18). https://doi.org/10.7176/jesd/11-18-02

Subscription or SAM Membership Required

Share This Article

Facebook
Twitter
LinkedIn