Barriers and public policies impeding SMEs’ international market expansion : a South African perspective

Abstract

In this study, researchers sought to evaluate the influence of four variables (access to procurement contracts, access to funding, regulatory frameworks, and access to market information) that are important for the market expansion of Small and Medium Enterprises (SMEs) in both their local and international markets. The Resource-Based View (RBV) and institutional theories were used as theoretical underpinnings of the study based on the knowledge that SMEs are limited in internal resources and SMEs’ successes depend on institutions. Researchers used a survey method with a structured questionnaire administered through a web-based platform. A total of 178 questionnaires were obtained and after data screening and cleaning, the sample size was reduced to 119. A multiple linear regression test was conducted, and the results suggested that SMEs are experiencing challenges in gaining access to funding, access to market information, and an unfavourable regulatory environment. The study recommended that the South African government must design and implement a policy aimed at facilitating the creation of business networks between SMEs and large private corporates to ensure that SMEs have access to enough private funding and market information. Also, favourable regulatory environment is essential to drive SME expansions and successes.