Internationalization Strategy and Process: Evidence from Indonesian SMEs

Small and Medium-sized Enterprises (SMEs) are less able to

take advantage of export opportunities from trade

liberalization than large firms despite various export

assistances provided by the government. This study aims to

investigate the strategy and process undertaken by

Indonesian SMEs to become exporter. The evidences were

collected from 271 exporting SMEs and 226 non-exporting

SMEs in 7 provinces. The findings show that potential

exporters can be identified through their firm and owner

characteristics. Exporting SMEs are driven by certain

motivating factors and utilize certain types of networking to

source reliable information regarding export opportunities. The

findings also show that SMEs’ initial export market is mainly

determined by target markets’ size and purchasing power and

the time taken for SMEs to internationalize differs across

provinces and product groups.

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