Government Export Promotion Organisations and SME Internationalisation: A case study of Ghana’s Non-Traditional Export Sector

Sasu, Edward

Abstract

Internationalisation has been identified as one of the major dimensions of firm growth (Peng and Delios, 2006). Karadeniz and Gocer, (2007) argue that exporting activities, for instance, increase profitability, improve trade balances, and help eradicate poverty and unemployment in both developed and developing countries. SMEs are becoming increasingly international and have been reported to contribute between 25-35% of the world’s exports in manufacturing (Andersson and Flores, 2008). However, available literature suggests that there are still many SMEs in both developing and developed countries that do not export, or do not contemplate doing so. Although, it is worth pointing out that exporting is not that financially intense and involves fewer financial and commercial risks as a foreign markets’ entry mode compared to some forms of direct investment (Lages and Montgomery, 2004; Agndal and Chetty, 2007). In this regard, many researchers (Lu and Beamish, 2001; Oviatt and McDougall, 1994) have recognised the important role played by SMEs in international markets.

There is strong advocacy for support for SMEs in the area of export assistance by a section of researchers’, policy makers and corporate entities. The European Commission report (2015) indicates resource constraints put SMEs at a disadvantage within international markets. The Commission maintains that few SMEs in Europe export beyond the EU. The Commission argues that increasing the internationalisation of SMEs and helping them to access markets outside the European Union is crucial for Europe’s competitiveness, economic growth and innovation. In Ghana and many developing countries, SMEs dominate the economic environment; hence, such assistance to small businesses will go a long way to boost the fortunes of the country. It is by this notion that governments all over the world implement export promotion programmes, (EPPs) in order to provide support to augment the internal capability of SMEs.

However, a review of the theoretical and empirical literature reveals that, for various reasons most SMEs are not making use of the promotion services for various reasons, even though the service is actually instituted for them. Some researchers have argued that EPOs in developing countries such as Ghana do not have free hands to operate and that political party cronies and a few companies with government connections are those most able to access export promotion facilities and services. This study investigated and analysed 42 qualitative interviews conducted in Ghana to provide a clear understanding of the role of such assistance in the exporting activities of Ghanaian SMEs in the Non-Traditional Export sector. The qualitative data collected from 30 SMEs and 12 key organisations associated with export promotion and SMEs development in Ghana shows that export promotion has had a positive impact on SMEs internationalisation, performance and growth. However, the challenges faced by EPOs affect service delivery as well as the diversity of the service. Moreover, lack of effective coordination and integrated approach of rendering services by organisations such as the Ministry of Agriculture, the Ghana Standard Authority and the various EPOs has resulted in numerous challenges and sometimes prevention of fruit and vegetables from Ghana entering the international market. The study suggests that, effective coordination of these organisations and together with government commitment to support service providers are vital for annexing market share in the developed European Union (EU) and the US markets.

Citation

Sasu, E. Government Export Promotion Organisations and SME Internationalisation: A case study of Ghana’s Non-Traditional Export Sector. (Thesis). Edinburgh Napier University. Retrieved from http://researchrepository.napier.ac.uk/Output/2090149

• Thesis Type: Thesis
• Deposit Date: Aug 28, 2019
• Publicly Available Date: Aug 29, 2019
• Keywords: internationalisation; SMEs; export promotion; government; Ghana; export sector
• Public URL: http://researchrepository.napier.ac.uk/Output/2090149
• Award Date: Jul 5, 2019