Factors influencing export performance for South African manufacturing SMEs

Abstract

The study aims at identifying factors that have influence on the export performance of South African manufacturing SMEs. Exports are considered an important contributor towards a country’s economic growth and wealth and an enabler of inflow of foreign exchange, specialisation, increased production, and much needed job creation. The research was conducted in South Africa, against the backdrop of the global financial crisis and a domestic market affected by economic stagnation in 2008 and the years of slow recovery that followed. In spite of the importance of and growing interest in emerging markets, comparingly few studies have been conducted within this environment and there is a call for more research to focus on growing economies, especially in Africa. The research was conducted by a web-based survey in the form of a structured questionnaire. The factors of interest, both internal and external to the firm, were extracted from the broad emerging literature in the field of export performance measures and determinants. The export performance was measured as a multi-dimensional construct, capturing both financial and strategic aspects. The data was analysed and the findings from this research were mainly extracted by structural equation modelling (SEM) in SPSS and Amos. The results were then compared with those published by earlier authors. Main factors contributing toward a higher export performance were found to be: well-planned export marketing strategy; not the international experience, but the ability to identify, access and apply market information; export to markets with stable and free market conditions; a higher level of internationalisation Factors in this research found to most negatively influence export performance are financial factors such as e.g. lack of pre-shipping finance and lack of access to market information, and distance to market, both geographic and psychic.