Internationalization Opportunities and Challenges for Small and Medium-Sized Enterprises from Developing Countries

The purpose of this study was to identify opportunities and challenges for internationalizing the small and medium-sized enterprises in developing countries. In this article the author examines the internationalization motives and strategies of the managers of these enterprises. A survey was conducted in Tanzania and the effect of the identified opportunities on the decision to internationalize was modeled using the multinomial logistic regression to determine the relationship between the respondent profile and the decision to be taken in the absence of the internationalization opportunities. The results have revealed the existing opportunities including export rehabilitation incentives, schemes as well as institutional supports granted from the governmental and nongovernmental organizations, development partners, and business associations. However, inadequate international business skills, unawareness of existing export promotion programs, poor access to finance, and imperfect foreign market information are the main challenges. Profit and growth goals and saturation of domestic markets are the key drives to internationalization, with indirect exporting being the main internationalization strategy. The author concludes by drawing attention to managerial and policy implications and future research directions.