Barriers to the foreign expansion of small and medium enterprises: Example of Subcarpathian exporters

Objective: The article aims to present determinants of the activity of the small and medium enterprises (SME) sector. Moreover, we attempted to identify barriers to the internationalisation process and the degree of perceived difficulties in Subcarpathian SMEs. Economic literature devotes a lot of space to enterprises’ internationalisation processes. Numerous theories and their empirical verifications explain this process by analysing the activities of large transnational corporations. The emergence of a global competitive environment has resulted in micro, small and medium-sized enterprises (SMEs) being involved in the internationalisation process. Research Design & Methods: In addition to the classic literature analysis, we utilized a survey of internationalized enterprises operating in the Subcarpathian region. We attempted to identify external and internal barriers to internationalisation in SME enterprises. We evaluated differences in the perception of difficulties associated with the existence of individual obstacles in groups of enterprises separated by their size using the non-parametric Kruskal-Wallis test. Findings: The article presents the determinants of the activity of the SME sector in the economic process or their export activity. Research confirms that SME enterprises in Poland, as a rule, are characterized by low resource potential, which causes them to conduct foreign expansion in less advanced forms, mainly in the form of internationalisation of the sphere of exchange. Implications & Recommendations: The research indicates the main internal and external barriers perceived by Subcarpathian exporters. At the same time, they confirm the thesis that SME foreign expansion is mainly conducted in the form of exports. SME companies, often having limited resources while being creative and innovative, choose this very form, which gives them opportunities not only to enter a foreign market and gain experience but also to gain new contacts, learn about the requirements of the target market’s customers or become familiar with international business. Contribution & Value Added: It is essential to indicate whether they conduct the internationalisation process similarly or perceive the same barriers to entry into the foreign market. The variety of forms of the internationalisation process and the many factors determining it, create great research opportunities. Still, they are associated with difficulties in inference and give rise to the danger of using simplifications or generalisations.