Exporting Activity at Turning Point: Continuity and Viability of Greek Manufacturing SMEs

Exporting Activity at Turning Point: Continuity and Viability of Greek Manufacturing SMEs

Christos Lemonakis (Assistant Professor, Hellenic Mediterranean University, Agios Nikolaos, Greece), Eleni Batzanakaki (Business Consultant, Heraklio, Greece), Stylianos Steiakakis (Business Analyst, Heraklio, Greece) and Alexandros Garefalakis (Hellenic Mediterranean University, Agios Nikolaos, Greece)
Copyright: © 2019 |Pages: 17
DOI: 10.4018/IJCFA.2019070103

Abstract

The purpose of this article is to study key factors affecting export activity in the Greek manufacturing small and medium enterprises (SMEs). Under this condition the authors focus on four consecutive sectors of Greek economic activity, i.e.: food and beverage (F&B), clothing, machinery, and wood and furniture sectors. The important characteristics are analyzed by using the sample firms' size, age, and financial indicators such as leverage and liquidity to underscore the importance of exporting activity in providing increased efficiency in the Greek manufacturing firms. The study uses an OLS econometric model to determine the importance of these factors and to present an overall perception of explanatory characteristics increasing business continuity and firms' viability.
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2. Literature Review

Quite a few numbers of manufacturing firms in developed countries have recognized the importance of exporting activity in their operation. This importance is shown by relevant studies (e.g.: Kaleka et al., 1995; Voulgaris et al., 2014; Lemonakis et al., 2016) but also the choice of exporting orientation as the most appropriate alternative for sustaining revenues during periods of economic crisis.

The Bolton report was the motivation for the academic community to take a closer look at the SMEs, thus acquiring enough knowledge in this area (Bolton, 1971). This led to many important notes, like the one pointed in times of economic crisis that smaller firms are those that sustain employment and proceed to the implementation of innovative solutions for their operations instead their larger competitors (e.g.: Acs et al., 1990; Cohen et al., 1991; Acs et al., 1997). It is expected that larger firms in terms of volumes (i.e.: Total Assets or Revenues) have higher capacity to exporting activity than the smaller ones, like the Small and Medium Enterprises (SMEs). This may lead to domination in the field of exporting activity from a small group of specialized firms and exporters (Panigirakis 1995). In a globalized economy this is not a necessity as with smaller amounts of capital investments even SMEs may expand their business activities in other countries. It is also important to note that export orientation plays a quite important role for the business development particularly for SMEs.

As already mentioned, the export process is a difficult and a complex one described to the process of supporting revenues entirely come from the domestic market. SMEs are said to play an important role in any economy and their “added” value in any economy has repeatedly been recognized. (Murphy, 1999; Zigouras, 2002; Bibou, 2003).

In the world market, business orientation and technological development facilitate firms’ growth provided they place emphasis on increased exporting activity, reducing at the same time significantly production costs (Acs et al., 1997). These new conditions have caused many enterprises even the smaller ones, to turn their market orientation to export activity. In this way, they aim at increasing their exporting activities no matter of their size or experience (Kaynak et al., 1987).

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