Determinants of Export Market Destination for Outputs from Small Locally-Owned Firms

Densil Williams

Abstract


This paper reports the findings of an empirical investigation into the factors that influence small, locally-owned firms that export their outputs. Because these firms are generally constrained by limited resources, they are normally unable to take advantage of all the export market opportunities that exist. Given their limited resources, they are forced to make tough decisions as to which markets to enter. To gain some insights into these important factors, 44 small, locallyowned exporters in the manufacturing and agricultural sectors in Jamaica were interviewed. The data from these interviews were analyzed using univariate statistics. The results revealed that the attractiveness of the export market has the greatest influence on where small firms sell their output. Attractiveness is operationalized to mean markets where there is a strong and growing demand for the firms’ outputs. These results send a strong signal that traditional explanation of export market entry decision needs to be recalibrated because they do not provide accurate predictions of where small firms will sell their outputs. Alternative explanations are needed to better understand this phenomenon.

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 University of Houston-Clear Lake