Major barriers to export growth in Maltese SMEs : an analysis

Abstract

Purpose: The dissertation is aimed at uncovering the barriers Small and Medium Enterprises (SME) face when trying to grow internationally. It is aimed at uncovering the reasons why SMEs look for international markets and the benefits of exportation and the challenges they face throughout the process of internationalisation.

Design: Semi-structured interviews were conducted to collect the relevant primary data. The interviewees consisted of shareholders of SMEs or people in managerial positions who are involved in the foreign market. An interview with an advisor who specialises in management consultancy with one of the big four audit firms was also conducted.

Findings: Transportation, obtaining finance and human resource are all barriers pertinent to the local scenario. The aforementioned barriers were applicable to the majority of the local SMEs but the main barrier which was consistent all throughout was Malta size and limitations that come with it. The size of Malta highly influenced all the barriers which ultimately aggravated the effect of the barriers on local SMEs. Additionally, Malta’s limited natural resources greatly contribute to the challenges local exporters experience throughout their exporting venture.

Conclusion: Although few can be done to overcome the barrier of size in Malta, there are possibilities on things that can be done to minimise these barriers for Maltese SMEs. One of the most predominant thing that can be done is to foster a culture of export through education in Maltese SMEs, this will ultimately minimise barriers which are aggravated for local SMEs due to the impact of economies of scale.

Impact: This dissertation adds to extant literature regarding trade barriers SMEs face to grow internationally as well as provides recommendations which, it is hoped to help SMEs overcome the barriers and increase their exporting potential.