Internationalization of small and medium scale enterprise in Tanzania: catalysts, constraints and strategic considerations.

This study deals with the internationalization of Small and medium scale enterprises (SMEs) in Tanzania. It specifically deals with the exporting activities of the SMEs. It focuses on the analysis of catalysts and constraints in order to establish strategic considerations, which would smoothen the internationalization of SMEs. The sample of SMEs under study include the manufacturing; food processing and tourist sectors. It comprises of 118 firms compiled from the East Africa SME survey - 2000. For analytical purposes, exports are specified as the dependent variable while the independent variables are categorized into two groups, i.e. firm's characteristics (such as investment in information and communication technology, skill intensity of management, age and size of firms); and external environmental factors (such as network, location, public infrastructure, market entry costs and competition). Most variables have been found to be significant in explaining the observed pattern and trends of internationalization of SMEs at convectional levels. The study shows that the internationalization of SMEs depends on the combination of the firm's internal and external factors. It is thought therefore, that if the following measures are affected they could smoothen the internationalization of SMEs. These include the institution of suitable measures for SMEs financing as the problems of small firms' internationalization are rooted from financial capabilities; promotion of ICT investment; establishment of quality control and standardization measures to tackle competition; promoting networking; infrastructural development and the extension of the role of SMEs development agencies in promoting export