Measuring Impact of Firm Specific Resources on Export Performance of SMEs: A Study of Indian Automobile and Textile Sectors

Abstract

ABSTRACT Small and Medium Enterprises (SMEs) play an important role in the economic activities of any country, including in exports. The topic of export performance of SMEs has attracted considerable attention from researchers worldwide. However, in developing countries, specifically in India, very few studies are available. This study has addressed the following three research questions: (i) What are the firm specific resources that drive the export Performance of Indian SMEs? (ii) Why SMEs export or don’t export? (iii) How do SMEs export? (iv) Why SMEs export or don’t export? (v) How do SMEs export?

This thesis has examined the role of firm specific resources in the export performance of Indian automobile and textile SMEs located in the southern and western parts of India. The firm specific Resources studied are (i) entrepreneurial resources (ii) knowledge based resources and (iii) property based resources. Under entrepreneurial resources, global mindset, international networking and international experience were studied. Knowledge-based resources include technological and marketing resources, while property based resources cover slack, internally generated financial resources and externally raised financial resources.

To gain better insights in to the research, the mixed method of research was used, in which both qualitative and quantitative data were analysed. A total of eight case studies were analysed qualitatively in which four firms were selected from southern India (two from the auto mobile sector and two from the textile sector) and four from western India (two from the auto mobile sector and two from the textile sector). In the case study method, in-depth personal interviews were conducted at the work place. In the quantitative study sample, 164 SMEs were analysed spread across both sectors and both zones. In the quantitative study, data was collected from CMIE’s database and through telephonic interviews.

The study found that entrepreneurial resources, knowledge based resources and property based resources played an important role in the export performance of SMEs. It was found that global mind set and international networking played an important role in export. Participation in trade fairs was found help fulinaugmenting export performance. There search showed that SMEs were using latest technologies and owners played the key role of marketer. One of the findings of the study is that SMEs relied more on internally generated financial resources.

It was also found that owners of many SME were risk averse and were passive exporters. They preferred to export through agents. Trust was found to be a significant factor in any export decision.

Further, the study also highlighted the regional and sectorial differences in the factors affecting the export performances of SMEs.

Keywords: Resource Based Theory, Small and Medium Enterprises, Entrepreneurial Resources, Knowledge Based Resources, Property Based Resources, Trade Fairs, Global Mindset, Networking, Technological Resources, Marketing Resources, Slack.