Keywords: competitive strategies, export market selection, SME exporters, emerging economies, globalisation, Malaysia, SMEs, small and medium–sized enterprises, cost leadership, differentiation, focus strategies, exports, export markets
The role of competitive strategies on export market selection by SMEs in an emerging economy
The study examines the relationship between competitive strategies and export market selection by small and medium–sized exporters in an emerging economy. Drawing from the literature on comparative advantages of exporters from developing countries and demand characteristics in export markets, hypotheses are constructed on how cost leadership, differentiation and focus strategies are associated with exports to developed and developing countries. Survey data from 214 manufacturing SME exporters in Malaysia is used to empirically examine the relationships using ordinary least squares regression. The results suggest that cost strategies are positively associated with exports to developed countries but not developing countries. Differentiation strategies show the opposite effect, cost strategies and focus strategies are negatively associated with exports to both types of markets. This study contributes by demonstrating that competitive strategies act as a firm–level factor influencing export market selection. Implications and limitations of the study are presented.