Category: Master’s Thesis

Small and medium sized enterprises (SMEs) play a crucial role in national economies. However, due to more limited resources, SMEs often face greater challenges in the international markets compared to larger organizations. Export markets create great growth opportunities for SMEs from which also the home country can gain through increased employment, technological development and higher standards of living. So, it comes as no surprise that the interest towards SME exports, the export barriers they face, and how SMEs can be supported in their exporting efforts have long been in the interest of scholars and governments. While such topics have been rather thoroughly researched, dynamic global markets and changes in institutional environments create a constant need to research these topics in the various contexts they take place in.

In my master’s thesis, I looked at how export assistance can help SMEs overcome barriers in exporting. My research focused on examining a case of a group of Finnish SMEs in the design and lifestyle businesses who took part in a contact-facilitating export assistance project aiming towards the Japanese markets. I approached this topic through examining what export barriers export assistance programs can mitigate, how SMEs experience the effect of export assistance programs, and what export-related resources and capabilities the export assistance programs can especially enhance. The empirical data in this study was mainly collected through interviews with the SMEs’ representatives who had partaken in the export project.

The group export project was organized by an organization that provides export and internationalization support. The main experienced export barriers were directly related to the areas that the export project also targeted. These included language, cultural and business practice differences and lack of knowledge of the target market which in turn make establishing needed connections for successful export operations more difficult. Support was provided through a combination of informational and experiential knowledge measures, with an emphasis on creating opportunities for gaining first-hand experiences to develop export-related resources and capabilities.

The contact-facilitating group export project provided support towards gaining a relevant understanding of the market, cultural and business practice difference, and establishing connections and networks both in the target market and home country. It also functioned as an additional expert opinion and motivation to pursue exporting in the target market. The participants of the export project included SMEs with various export experience levels. However, it was considered that those SMEs whose largest market was domestic but also had experience in systematic exporting were able to gain the most in terms of exporting to Japan. The least experienced benefited more in terms of general knowledge on how to export and an increased motivation to do so.

Based on the empirical data I collected, it can also be stated that while export assistance was not financial by definition there is no denying that the financial support of the project crucially affected the SMEs’ decision and ability to participate as financial resources are scarce and the perceived risk in investing relatively much into one market is rather high.

My research shows that by providing informational and experiential knowledge, export assistance can help SMEs lower and overcome barriers to exporting through increasing export related resources and capabilities. Perhaps the most interesting finding of my research is that the peer group network of the project group was considered to be one of the greatest – though not necessarily intended – benefits of participating in the project. Thus, while receiving or offering export assistance through a group project approach may lead to some compromises, the benefits of an internal network which can act as a source of valuable social capital should also be considered. In order to fully reap the benefits of the phenomenon it would be useful to better understand how peer group as an affiliation can produce social capital especially in the context of exporting and export assistance.

Milja Sorvari