SMEs and International Marketing

Abstract

International marketing research has usually built upon the supposition that small firms are less competitive than larger firms, primarily due to scarce resources. However, empirical investigations of the direct relation between firm size and export performance have yielded conflicting results. This paper presents the hypothesis that small firms develop an export strategy aimed at reducing their size disadvantages. Using a sample of 335 Norwegian industrial firms together with structural equations modeling, we identified a direct linkage between firm size and export performance, in which small firms are less successful than larger firms. We found that these small firms tend to follow a niche focus strategy and that this strategy is further linked to product quality and high attention to personal selling. Both product quality and personal selling as well as distribution efficiency render a positive impact on export performance. Accordingly, these small firms seem to have developed an export strategy that reduces their size disadvantages. This study demonstrates that an export strategy measurement instrument developed in the United States can be translated and used in another country with a dissimilar language and culture. Second, the study uses an analytic approach that makes it possible to examine both direct and indirect effects. Third, the investigation contributes new insight regarding how small firms develop export strategies aimed at reducing their size disadvantages.

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