Limited in-house resources and the use of official foreign trade promotion by small businesses

Abstract

Small firms face size-specific barriers with respect to entry into and development of foreign markets. To counteract these structural disadvantages, governments across the globe have established a multitude of institutions and instruments to support small firm internationalisation. Grounded in the theoretical framework of the resource-based view, our study analyses the participation patterns of enterprises in foreign trade promotion schemes with respect to firm size. Our study is based on regression analyses using data obtained from an original survey that covers 615 German enterprises across all sectors. Our findings provide strong evidence that: 1) small businesses use foreign trade promotion programmes to a lesser extent than their larger counterparts; 2) the lack of specialised in-house resources of small firms - which should be counter-balanced by public promotion schemes - is the main reason why support measures are not more effectively used by small enterprises.