THE IMPACT OF FINANCIAL RISKS AND RESOURCES ON EXPORT INTENTION: EVIDENCE AMONG SMES IN AN EMERGING ECONOMY

One of the major considerations for pursuing export move is the financial standing of a firm. Traditional views hold that export decisions are the result of balancing the trade-off between available resources and potential risks. Many studies have concluded that resources must surpass the risks in order to materialize export efforts. Despite this pertinent argument, many studies have only examined the financial factors as either stimulus or barriers factors, yet research on the combination of these effects is still lacking. Thus, the purpose of this study is to examine the impact of both financial resources and risks on export intentions of local firms. Specifically, the model integrates three variables: internal financial resources, external financial constraint and perceived export costs, while controlling for firm and product effects. In the context of small and medium-sized enterprises (SMEs), the analysis is done at the managerial level but interpreted as the firm's behavior because the owner normally acts as a sole decision-maker. Survey data was collected from 142 firms in Malaysia, while complementary data was retrieved from the SME Corporation Malaysia database. Through OLS regression, the results show that firms with more internal financial resources, fewer external financial constraints, and perceived lower costs have a greater intention to become exporters. However, perceived export costs show an insignificant moderating effect between internal/external financing and export intention, as predicted. This study contributes to the literature by integrating push and pull financial factors for comprehensively understanding their impact on the internationalization process of firms.