Small and medium-sized enterprises’ exporting: Home and host country motivators effect on first and successive export venture decisions

1. THEORETICAL BACKGROUNDResearch in the area of entry-mode selection (including motivation for exporting) has mostly been theoretical and under researched (Anderson & Gatignon, 1986; Bower, 1986; Calof & Beamish, 1995; Dunning, 1988; Hennart,1989; Hill et al.,1990; Leonidou et al., 2007; Root, 1987; Tan et al., 2007). The existing empirical research has mostly focused on the manufacturing sector (Clegg, 1990; Gatignon & Anderson, 1988; Trimeche, 2002) or entailed a mix of sectors and industries (Harrigan, 1981; Kogut & Singh, 1988). Research on the SME services sector has seen a rise in research albeit smaller (Agarwal & Ramaswami, 1992; Brouthers et al., 2003; Erramilli & Rao, 1993). Regardless of the sector, up until today the entry mode and the pre-export motivation research conducted of large multinationals has been researched more extensively than those of the small and medium-sized firms (SMEs). Nevertheless, SMEs have been the fastest growing segment in international trade (Etemad & Wright, 1999) and should not avoid exporting due to the lack of knowledge or resources.Work on the origin of the behavioural triggers of exporting (including location) is not as widespread as the work on the definition of the motivators per se (Tan et al., 2014), in addition as Beleska-Spasova and Glaister, 2009) and Cerrato and Piva (2015) point out, previous research on regionalization and exporting focused predominantly on the regional nature of large multinationals, as opposed to SMEs, while traditionally international trade in goods (and services) has been regarded as the principal channel for economic integration.How can SMEs reduce market research costs by relying solely and proactively on home country and internal advantages and motivators? The findings of this paper reinforce and extend previous work on exporting and export promotion such as the work of Leonidou (2007) by assessing the impact of motivators on export choice from a regional perspective.The paper focuses on the United Kingdom (UK) manufacturing sector as manufacturing (although declining in importance domestically) still represents 54% of UK exports, employs 2.6million people and the UK remains the world's 11th largest manufacturer. The European Union (EU) is the UK's main export destination along with the United States of America. According to the European Commission (2007), those who expanded abroad reported profit/sales ratios of 7.9% as opposed to 4.2% of those who did not.Internationalizing SMEs not only conduct more RD i.e. the EU and UK.In terms of export it is important for the UK SMEs to view the EU common market as a significant motivator due to the advantages it bestows to the SMEs; red tape and border bureaucracy has been significantly reduced, trade within the EU has risen by 30% since 1992 (European Commission, 2007). Nevertheless as Mulhern (1995) points out many of the developments of the EU common market are not necessarily favourable to SMEs, as policies are criticised as being ineffective for SMEs, leading to a debate on the influence of EU regulations on SME exporting and region. As D'Angelo et al. (2013) point out geographical scope has a clear impact on SME export performance.The difference between must and want determines which category of motivators should in theory affect the firm and which should not; these motivators are situational (i.e. they act at one point in time) and generally consist of variables (reactive and proactive, home and host) such as unsolicited orders, size, excess capacity and common market membership (Driscoll, 1995; Kuada and Sorensen, 2000). …