SMEs, Southeast Asia, exporting, triangulation, global economy, national economy
Abstract
There is a growing consensus among policymakers and academics that internationalization of domestic firms will create jobs and wealth, yet relatively little is known about the incentives for small and medium enterprises (SMEs) to undertake this process. I analyze the motivations of SMEs from Vietnam, Indonesia and the Philippines to engage in exporting in the context of triangulation, which considers the impact of the global economy, national economy, and societal milieu on SMEs. I find that scarce demand in the home market is positively and significantly correlated with exporting, while favourable government incentives are less significant. Significant foreign demand and existing parent–subsidiary relationships are important explanations for SME exports from Vietnam, but not for Indonesia or the Philippines. These findings suggest that national economies are currently more important than the global economy for SME exports in Southeast Asia; my results call into question the ability of governments to encourage SMEs to internationalize via exporting.
