Abstract
The aim of the article is to illustrate that export experience of small and medium enterprises (SMEs) has a statistically significant effect on financial performance. This may seem obvious, but similar studies done elsewhere have shown conflicting results. The study’s findings also show conflicting results in the three single-item performance measures used, namely, sales, profits and savings. Data from a sample of 144 exporting SMEs were collected using a structured questionnaire. Export experience is measured by years exporting, and financial performance covers a period of three years. A Chi-square test was used to measure the effect of experience on performance. Results show that export experience had a statistically significant effect on sales and profitability, but not on savings. They also show that performance in sales and profitability increased with export experience. It is, therefore, recommended that appropriate interventions to improve exports, should take export experience into account. Keywords: export experience, performance, SMEs, sales, profitability, savings, Southern African Development Community. JEL Classification: L25
Highlights
Exports by small and medium enterprises (SMEs) contribute to the economies of many developing countries in various ways, such as employment creation and poverty alleviation
Growth in exports is positively related to growth in Gross Domestic Product (GDP) (Van der Walt, 2007; Soontiëns, 2002; Leonidou, Katsikeas, Palihawadana & Spyropoulou, 2007; Okpara, 2009)
The current study aims to show that there is a difference in financial performance between younger and older exporters
Summary
Exports by small and medium enterprises (SMEs) contribute to the economies of many developing countries in various ways, such as employment creation and poverty alleviation. The level of exports by small and medium enterprises (SMEs) is not precisely known. This is due to the informal nature of the export activities. The amounts and values involved are so small that it is difficult to establish whether the goods are for commercial or personal use. Becomes important to understand how small exporting firms are performing, so that appropriate support interventions can be planned and implemented
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