Export capacity impact factors on Chinese SMEs. A survey analysis of Fujian Province
| Date | 09 February 2010 |
| DOI | https://doi.org/10.1108/17544401011016681 |
| Pages | 54-70 |
| Published date | 09 February 2010 |
| Author | Liping Su,John Adams |
| Subject Matter | Economics |
JCEFTS
3,1
54
Journal of Chinese Economic and
Foreign Trade Studies
Vol. 3 No. 1, 2010
pp. 54-70
#Emerald Group Publishing Limited
1754-4408
DOI 10.1108/17544401011016681
Export capacity impact factors on
Chinese SMEs
A survey analysis of Fujian Province
Liping Su
Putian University, Putian, China, and
John Adams
School of Accounting, Economics, and Statistics, Edinburgh Napier University,
Edinburgh, UK
Abstract
Purpose – The purpose of this paper is to identify the main impact factors on the export capacity of
small and medium-sized enterprises (SMEs) in Fujian Province, China.
Design/methodology/approach – A model containing internal and external impact factors on the
export capacity of SMEs was developed. Data were collected by e-mail questionnaire surveys from
random samples of SMEs in Fujian Province and 47 usable responses were statistically analyzed by
SPSS14.0 using frequencies, t-tests, correlation and linear regression.
Findings – The analysis shows that the government and home and export markets constitute the
external impact factors while resource availability has an important internal impact on the expor t
capacity of SMEs in Fujian. Firm scale, cultural differences and business networks do not influence
the export capacity of SMEs; however, management, products, experience and geographical location
have an indirect effect.
Practical implications – The findings of this study suggest that SMEs in Fujian need to seek more
support from government and explore more international markets. It is suggested that an SME
export support system should be established by local government in order to better promote the
acquisition of resources, product innovation and business network development.
Originality/value – This study offers a first insight into the understanding of Fujian SMEs’ export
context and explores the relationships between (theorized) imp act factors on SME export capacity at
the micro level.
Keywords Small to medium-sized enterprises, Exports, China
Paper type Research paper
Introduction
Small and medium-sized enterprises (SMEs) play a crucial role in the Chinese economy
and substantially contribute to exports. Statistical data from the Fujian Economics and
Trade Committee show there were 51,821 manufacturing SMEs in Fujian Province in
the first half year of 2008, accounting for 99.8 percent of total industrial enterprises.
These enterprises provide jobs for up to 4.884 million people, which is 92.8 percent of
the total employees. The gross industrial output value was 687.184 billion Yuan,
presenting 84.6 percent of the total output value in Fujian Province. The export value
(139.292 billion Yuan) of the SMEs was, however,72.2 p ercent of the total exports in the
first half of 2008, 12.4 percent percentage points lower than the ratio of gross industrial
output value. Data from the National Bureau of Statistics of China also showed that
Fujian was in a relatively inferior position among the ten largest export provinces in
2008 (see Figure 1).
Relevance of the paper
This paper is important and relevant in two key respec ts: first, the literature focussed
on export capacity to date generally highlights factors that are mo re relevant to SMEs
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Export capacity
impact
55
in developed countries and in some developing countries that do not share the recent
historical growth rates of China. We show in this paper that the a priori theorized
relationships and empirical results from the literature only partially apply to the case
of Fujian Province. Second, the current global recession has re-focussed attention in
China toward expanding the domestic market. This is wholly welcome but we argue
that such a re-focus will fail to dynamize the SME sector in the way exposure to foreign
markets is able to do so. Hence, as the global economy (eventually) moves back to
positive growth it is important for SMEs in Fujian Province to be in a p osition to take
advantage of this. This therefore suggests that an analysis of the factors that may have
constrained SME exports in the past in Fujian is both timely and relevant to local
economic policy as well as to the Fujian SME sector itself.
Literature review
The development of Chinese SMEs can be divided into four phases: early stage, growth
and fluctuation, innovative transformation and rapid growth (Sun, 2003). The SM Es
have now become the major driving force in the Chinese economy, which has led to a
flourish of studies on SMEs. Liu and Zhongshun (2001) analyz ed the development of
SMEs in the south of Jiangsu Province, in terms of business characteristics, refor m,
institutional evolution and financing environment. Jie (2002) examined the industrial
structure, spatial arrangement and str ucture of ownership in the western region of
China. Liu (2004) focussed on the relationships between regional economic
development and growth of SMEs. Jiang (200 2) examined the regional discrepancy of
SMEs, and concluded that the differences in economic structure are attributable to
regional disparities. After examining the provincial differences in entrepreneurship,
Yang and Xu (2006) revealed that the regional differences in the development of
Chinese SMEs were directly related to local business growth. However, none of these
studies explicitly address the issues surrounding exp orting capacity development or
constraints. There are two studies that do this: employing the framework proposed by
Zhang et al. (2008a,b) suggest that the major differences between rapid and slow
growth SMEs in China lie in their different resources, capacities and entrepreneurial
strategies. Lu and Beamish (2001) discussed the relationships among SME’s
performance, exporting activities , the level of foreign direct investment (FDI) and the
level of alliances with local partners. However, numerous studies of SME development
issues were reviewed for this research and we could find less than 20 percent that
related to China in any serious way and less than 5 percent that addressed the issue of
exporting at all. There are very few studies relating to China on such issues and even
fewer in the published literature that relate to Fujian Province. There is clearly a
Figure 1.
The ten largest export
provinces in China
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