marketing capabilities (e.g. Morgan, Kaleka and Katsikeas, 2004; Zou, Fang and Zhao, 2003;

Morgan et al., 2003);

export attitudes and commitment (e.g. Cicic, Patterson and Shoham, 2002; Evangelista, 1994);

key informational resources and skills (e.g. Piercy, Kaleka and Katsikeas, 1998; Morgan et al.,

2003), firms’ degree of internationalisation (Cadogan, Kuivalainen and Sundqvist, 2009;

Kuivalainen, Sundqvist and Servais, 2007); and

firm-wide entrepreneurial orientation (e.g. Yeoh and Jeong, 1995; Robertson and Chetty,

2000; Balabanis and Katsikea, 2003).

More specifically firms can use objective and subjective measures. Typically, objective measures

cover export volume, export sales' growth and export intensity. The last measure – export intensity – is

perhaps one of the most popular objective measures used by analysts. Export intensity is the

proportion of export sales to a firm's total sales. It is also referred to as export sales ratio. However,

this measure provides no guarantee of sustained export profitability (Matthysens and Pauwels, 1996,

cited in Watson, 2001), and it can be affected by factors other than better exporting operations.

Additionally, it does not reflect the competitive dimensions of export success (Altintas et al., 2007).

Export intensity can also be affected by sales volume (numerator) as well as the denominator, which

means that firms may have high export intensity while they export in small volume (Sousa, 2004).

It has been further argued, that the close involvement of owner-mangers in most decisions made by

SMEs means that subjective measures could be more appropriate for evaluating success (Louter et al.,

1991). These subjective measures include ‘softer’ targets such as such as executives' and export

managers' perceptions of export performance (Bilkey, 1985, cited in Shoobridge, 2004). The argument

here is that a reasonable measure of success is the ability to meet a business’s goals, and, therefore,

any measure of export performance should include self-assessment of success (Vivekananda and

Rajendran, 2006). Management expectations and commitment are important in export initiation,

continuation and eventual export success (Cavusgil, 1984; Williams, 2002). Subjective measures allow

for easier data collection.

1.4.2.Implications for Policy and Measurement at the System or Country Level

While it is problematic to equate or relate directly firm level performance measures with overall

country level performance, it may be useful to obtain some insights for policy through a better

understanding of entrepreneurial orientation of firms. This might enable governments to develop

strategies with a specific focus. Such an approach could then direct government to:

provide adequate incentives based on monitoring firms which are better able to develop

strategies for exporting because of their proactiveness;

generate indices for identifying and promoting firms which demonstrate better performance

over time because of their proactiveness or innovation capabilities;

locate and target firms in specific growth sectors and in particular regions where performance

indicators are stronger than in other areas; and

encourage the development of related import and FDI strategies to boost international trade.

Care has to be taken to ensure dynamic approaches to monitoring and development of policy so that

changes in the structure and modes of internationalization are recognized across different firms,

sectors and regions.

1.5.

Internationalisation Strategies for SMEs

Internationalisation strategies can be developed at three levels:

strategic orientation (specialisation, domination by costs, differentiation, diversification,

vertical integration, chain strategy);