Exploring critical internal enablers to SMEs export performance: evidence from Qatar

The internationalization of SMEs is crucial for global trade, with exporting being a primary approach. While research exists on export performance determinants (internal and external factors), context-specific challenges in emerging markets, particularly for manufacturing SMEs, require further investigation. Existing literature highlights various internationalization models (resource-based view, network approach, Uppsala model, and innovation-related models), suggesting that a firm's resources and capabilities, network relationships, accumulated knowledge, and innovative capacity influence its success. However, research is lacking on the internal enablers for SMEs in emerging markets like Qatar, which heavily relies on hydrocarbon exports but seeks economic diversification through support for its non-hydrocarbon manufacturing SMEs. This study focuses on these SMEs to identify critical internal factors bolstering their export performance, contributing both theoretically and practically to understanding SMEs in emerging markets, especially within the relatively under-researched GCC context.

The literature review examines various theoretical lenses to understand SME internationalization, including the resource-based view (RBV), the network approach, the Uppsala model, and innovation-related models. RBV emphasizes firm-specific resources and capabilities as drivers of internationalization success. The network approach highlights the importance of relationships and networks in overcoming the liability of outsidership. The Uppsala model focuses on incremental internationalization based on accumulated knowledge and networks. Innovation-related models emphasize the export development process as a series of innovations. The review also examines previous research on internal enablers for SME exporting, including management skills, social capital, human capital, innovation, marketing competencies, and networking capabilities. It contrasts the challenges faced by SMEs in emerging markets, such as resource constraints, managerial hurdles, and market knowledge deficits, with those in developed economies.

Employing a qualitative research approach, this study utilized in-depth interviews with 20 SME managers from 11 non-hydrocarbon manufacturing sub-sectors in Qatar. Participants were selected using purposive sampling, ensuring they were from non-hydrocarbon manufacturing SMEs, met Qatar Development Bank's SME definition (employees <250, annual turnover < QAR 100 million), and were actively engaged in exporting. Interviews, conducted over five months in 2021, lasted between 45 and 120 minutes and were semi-structured, using an interview guide to cover key themes like firm establishment, export history, export channels, learning from past experiences, and key internal enablers. Data analysis followed a thematic analysis approach involving data coding, categorization, and iterative interpretation of interview transcripts.

Thematic analysis revealed five key internal enablers influencing the export performance of Qatari manufacturing SMEs: 1. **Employees with Networking Skills:** SMEs emphasized the importance of hiring personnel with pre-existing networks and international experience to rapidly access target markets and overcome information asymmetries. Examples highlighted the significant impact on export value from hiring such individuals, even in firms with existing export teams. 2. **Effective Supply Chain Management:** Efficient supply chain management, including timely deliveries and optimized inventory management, was crucial, especially in light of disruptions like the 2017 blockade and the COVID-19 pandemic. The study highlights examples of SMEs improving order cycle times and optimizing shipment quantities to enhance customer satisfaction and reduce costs. 3. **Product Diversification:** Product diversification emerged as a key strategy to mitigate risks associated with market volatility and dependence on single products. The study illustrated how SMEs diversified their product portfolios in response to external shocks (e.g., the blockade), resulting in expanded market access and more stable revenue streams. 4. **Digitalization:** Digitalization played a significant role in helping SMEs overcome challenges imposed by the COVID-19 pandemic and travel restrictions. Examples showed how improved online presence, virtual exhibitions, and digital marketing boosted visibility, generated leads, and facilitated international market engagement. 5. **Market Intelligence Capabilities:** Effective market research and intelligence gathering were crucial for identifying opportunities, understanding market dynamics, and making informed decisions before entering new markets. The study demonstrated how access to resources such as the ITC Trade Map portal helped SMEs identify untapped markets and gain competitive advantages.

The findings provide unique insights into the internal enablers of SME export performance in the Qatari context. They align with resource-based view and network theories, emphasizing the importance of firm-specific resources (networking skills, efficient supply chains, diverse product portfolios, and market intelligence) and network capabilities in driving export success. The study also highlights the adaptability of SMEs to external shocks, using digitalization to offset limitations from events such as the blockade and the pandemic. The results underscore the need for a nuanced understanding of internal enablers, tailored to the specific context of emerging markets.

This study identifies five key internal enablers crucial for enhancing the export performance of Qatari non-hydrocarbon manufacturing SMEs: employees with networking skills, effective supply chain management, product diversification, digitalization, and market intelligence capabilities. These findings offer valuable implications for policymakers, encouraging support for SME development in these areas. Future research should investigate the interaction between these enablers, explore other potential enablers at different organizational levels, and utilize larger and longitudinal datasets for more robust analysis.

The study's limitations include its reliance on a relatively small, purposive sample from Qatar's non-hydrocarbon manufacturing sector. The findings may not be generalizable to all SMEs or other contexts. The cross-sectional design limits the ability to analyze the evolution of these enablers over time. Further research with a larger, more diversified sample across various countries and sectors is recommended, along with longitudinal studies to understand the dynamic interplay of these factors over time.