Internationalization of SMEs and Their Income-Price Effects on Export Market: a Case of the Selected Asian Countries




 International trade causes that markets to become more competitive and small-medium sized enterprises (SMEs) learn to compete effectively within this increasingly competitive global market place. SMEs are able to take advantage of increased opportunities in domestic markets that follow from international trade. It is indeed a way for internationalization of SMEs. This paper analyzes income and price elasticities of the export model which has been specified for export market of SMEs’ in the selected Asian countries. The estimated elasticities revealed the responsiveness of exporting goods supplied by the SMEs in these countries with respect to changes in different incomes and relative export price. Accordingly, we estimate an export regression model (including demand and supply equations) based on the cross-sectional observations of the selected Asian countries including China, Singapore, Thailand, Malaysia, Indonesia, India, the Philippines, Vietnam and Pakistan over the period 1990-2008. We have found that price and income elasticities are statistically significant and have the expected signs. The implication of our findings is that price and income are appropriate determinants for international trade expanded by Asian SMEs.       JEL Classification: C23, F14, O47, P42