Barriers to Internationalisation: A Study of Entrepreneurial New Ventures in New Zealand

Abstract

This paper presents the findings of a study of the perceptions of the barriers to internationalisation by 561 New Zealand Entrepreneurial New Ventures (ENVs). Significant differences in the perception of the barriers are identified according to the level of international activity of New Zealand ENVs. Exporters and likely exporters consider the main barriers to internationalisation to be finance and cost-related factors. A lack of New Zealand government incentives are also seen to be major barriers for these two groups with likely exporters also perceiving their lack of international experience to be a hindrance. By comparison non-exporters perceive firm size to be the biggest barrier to internationalisation followed by a lack of market knowledge and experience. Industry was found to have no influence on the perception of barriers to internationalisation, however, firm size does have an impact. Copyright Springer Science+Business Media, Inc. 2004internationalisation, entrepreneurial firms, barriers to export,

Models of internationalisation: the New Zealand experience

“…Many firms, particularly smaller firms, rely heavily on market-led innovations for success in international markets. Barriers to internationalisation differ somewhat by size and experience, with smaller less-experienced firms citing finance as the most significant (see also Shaw and Darrock, 2004). Larger firms with more experience are more concerned with market access, organisational systems and managerial capabilities.…”

“…Deng et al (1995), for instance, find just 22 percent of firms used more advanced modes involving overseas sales offices, joint ventures, and sales or production subsidiaries. Other studies have found even lower proportions of firms undertaking foreign direct investment (FDI) (4 per cent of manufacturing SMEs in Gerschewski"s (2005) study, 8 per cent in Shaw and Darrock (2004); 8 per cent in Bayfield et al 2009; also see Cooling, 1995;Bollard and Cremer, 1999;and Deloitte, 2008 for more on outward FDI by New Zealand firms). This exporting focus seems common to both traditional and emergent firms, as Chetty and Campbell-Hunt (2004a) conclude, that, most of their traditional counterparts, "born global" firms from New Zealand have not progressed to direct equity modes of internationalisation (ie.…”

“…In their study of 561 small, entrepreneurial firms, for instance, Shaw and Darrock (2004) Networks appear to be a particularly important mode for the early and rapid internationalisation of SMEs (Chetty and Campbell-Hunt, 2003a;2004a). Determination and drive of the founder complemented by direct and personally maintained network relationships help overcome resource limitations in early stages of internationalisation.…”

“…The main constraints to internationalisation for SMEs are finance and cost-related factors, the high costs of selling abroad, limited access to capital, limited knowledge of overseas market opportunities and the lack of New Zealand government assistance/incentives to export (Shaw and Darrock;2004;OECD/APEC, 2007;Akoorie and Enderwick, 1992). Smaller firms are more likely to use personal connections and networks to support internationalisation (Kingshott and Pickering, 2005).…”

The effect of firm characteristics and the propensity to export decision in food industry

“…Katsikeas et al (2000) evaluated more than 100 papers of pertinent empirical investigation to evaluated and to critique export performance measurements and provided some insights. Shaw and Darroch (2004) presented the findings of a comprehensive investigation on the perceptions of the barriers to internationalization by 561 New Zealand Entrepreneurial New Ventures (ENVs). They identified substantial differences in the perception of the barriers based on the level of international activity of New Zealand ENVs.…”