Factors influencing internationalization of tanzanian small and medium scale enterprises

This study analyzed the factors influencing internationalization of Small and Medium Enterprises (SMEs) in Tanzania. More specifically, the study examined the influence of four aspects, namely, domestic competition pressure, Government support, management skills and attitude on foreign markets and availability of domestic network on SMEs internationalization. To achieve these objectives, 170 owners, managers and supervisors of SMEs were involved in the study. Positivism research paradigm and quantitative data research methods were employed. Structured questionnaire was used to collect primary data. The Chi square and multiple regression analysis were used to test the hypotheses. The Statistical Package for Social Sciences (SPSS) was used for this analysis. Each variable was found to be effective in influencing internationalization of SMEs. Overall study findings revealed that, Government offers several export support to SMEs in terms of credit guarantee, low interest loans and export promotions. Furthermore, the Tanzania SMEs policy of 2002 emphasizes more on the poverty reduction in terms of domestic concentration of SMEs rather than internationalization of SMEs. Likewise, internationalized SMEs have been able to associate with large Companies and use networking as a strategy to internationalize. However, most SMEs are not aware of the credit guarantee schemes offered by the Government. In conclusion, the study recommends that Government should increase export support to SMEs through guarantees and SMEs to use networking and associate with large Companies.