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Barriers to the foreign expansion of small and medium enterprises: Example of Subcarpathian exporters

Abstract

Objective: The article aims to present determinants of the activity of the small and medium enterprises (SME) sector. Moreover, we attempted to identify barriers to the internationalisation process and the degree of perceived difficulties in Subcarpathian SMEs. Economic literature devotes a lot of space to enterprises’ internationalisation processes. Numerous theories and their empirical verifications explain this process by analysing the activities of large transnational corporations. The emergence of a global competitive environment has resulted in micro, small and medium-sized enterprises (SMEs) being involved in the internationalisation process.

Research Design & Methods: In addition to the classic literature analysis, we utilized a survey of internationalized enterprises operating in the Subcarpathian region. We attempted to identify external and internal barriers to internationalisation in SME enterprises. We evaluated differences in the perception of difficulties associated with the existence of individual obstacles in groups of enterprises separated by their size using the non-parametric Kruskal-Wallis test.

Findings: The article presents the determinants of the activity of the SME sector in the economic process or their export activity. Research confirms that SME enterprises in Poland, as a rule, are characterized by low resource potential, which causes them to conduct foreign expansion in less advanced forms, mainly in the form of internationalisation of the sphere of exchange.

Implications & Recommendations: The research indicates the main internal and external barriers perceived by Subcarpathian exporters. At the same time, they confirm the thesis that SME foreign expansion is mainly conducted in the form of exports. SME companies, often having limited resources while being creative and innovative, choose this very form, which gives them opportunities not only to enter a foreign market and gain experience but also to gain new contacts, learn about the requirements of the target market’s customers or become familiar with international business.

Contribution & Value Added: It is essential to indicate whether they conduct the internationalisation process similarly or perceive the same barriers to entry into the foreign market. The variety of forms of the internationalisation process and the many factors determining it, create great research opportunities. Still, they are associated with difficulties in inference and give rise to the danger of using simplifications or generalisations.

Keywords

internationalisation, export, barrier, enterprise, SME sector

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Author Biography

Katarzyna Puchalska

Doctor of Economics at the University of Rzeszów, Faculty of Economics and Finance of Economics and Finance, Poland. She graduated from Warsaw University of Life Sciences. Her research interests include the internationalisation of enterprises. She conducts classes on international economics, enterprises on the international market, and foreign trade operations. Supervisor of numerous bachelor’s and master’s theses.

Agnieszka Majka

Doctor of Economics at the University of Rzeszów, Faculty of Economics and Finance of Economics and Finance, Poland. Her research interests include pertaining to the measurement and evaluation of life quality, the internationalisation of enterprises and the application of quantitative methods in the social and economic sciences.

Patrycja Żegleń

Doctor of Economics at the University of Rzeszów, Faculty of Economics and Finance of Economics and Finance, Poland. She graduated from the Warsaw School of Economics. Her research interests include public-private partnerships, entrepreneurship, economy of tourism. She is the author of over 100 scientific publications. She took part in several European projects (both scientific and didactic).


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