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another country. Exporting firms also face disadvantages such as the cost of transportation, and even
the low cost of the production of the goods in that host country (Hill, 2007). . A common theme that
runs through many studies on export barriers (i.e. the actual barriers exporters encounter) (e.g. Fillis,
2002; Leonidou, 2004; Shaw and Darroch, 2004; Tesfom and Lut, 2006; Hutchinson et al., 2009;
OECD, 2008, 2013) is that these barriers consist of both internal and external factors.
Internal Barriers
Internal export barriers consist of the inability of SMEs to initiate, develop and sustain export business
because of problems the firm faces. These internal, firm-specific problems can be sub-divided into
informational barriers, functional barriers, marketing barriers, logistical barriers, financial barriers and
human resource barriers (e.g. Leonidou, 2004; Tesfom and Lut, 2006). In addition, the actual external
barriers represent those that are exogenous to the SME (i.e. barriers emanating from the external
environment). Researchers have sub-divided these types of barriers into industry barriers, procedural
barriers, socio-cultural factors and customer barriers (i.e. customer perception of product
characteristics and lack of government incentives (e.g. Leonidou, 2004; Tesfom and Lut, 2006).
According to a survey conducted jointly by OECD and APEC on both SMEs and policy makers, the
majority of firms and governmental authorities rate barriers related to internal capabilities and
resources as being more significant obstacles to internationalisation than those related to business
environment. Specifically, when asked to rate a list of 47 barriers according to the degree to which
they acted as an impediment to their ability to access international markets, SMEs participating in the
survey considered problems “internal” to the firm to be more important barriers to access to
international markets than barriers stemming from the home and foreign/host environment within
which firms operate, including policy barriers (tariffs and regulations).
However, there appears to be a distinction between firms in terms of export activity. Non-active
exporters tend to be more concerned with financial and access barriers, whereas firms that are already
exporting prioritise issues related to overall business environment, including trade barriers. This
distinction between inexperienced and experienced exporters is also present in other studies which
indicate that firms with experience with foreign markets tend to pay more attention to barriers outside
their control (Moini, 1997). These results suggest that SMEs undergo a learning process as they
internationalise. Once firms overcome internal constraints they become more aware of other
challenges in their business environment, including tariffs and other trade regulation.
The top ten barriers in the OECD-APEC policy makers’ survey relate almost exclusively to a lack of
knowledge and internal resources, both financial resources and human resources. External barriers,
especially those imposed by governments, scored relatively low (Table 1.1).