~ Pergamon Omega, Int. J. Mgmt Sei. Vol. 25, No. 6, pp. 677-690, 1997 © 1997Published by Elsevier ScienceLtd. All rightsreserved Printed in Great Britain PII: S0305-0483(97)00035-2 0305-0483/97 $19.00+ 0.00 Obstacles to Export Initiation and Expansion ROBERT E. MORGAN University of Wales, Cardiff, UK CONSTANTINE S. KATSIKEAS University of Wales, Cardiff, UK (Received January 1997; accepted after revision July 1997) The increasing globalization of markets witnessed in recent years has been paralleled by growing research attention upon the internationalization of small and medium sized firms. In industrialized nations, a significant degree of dormant export potential has been identified in this firm size sector. The proliferation of extant literature can explain structural, behavioural and process-based aspects of export expansion. However, it remains that limited conceptual and empirical insights exist that explain the phenomena underlying pre-export decision making and behaviour. The present inquiry addresses this issue and investigates those obstacles that act upon domestic firms' intentions to enter overseas markets via the export channel. Specifically, the empirical study documented here establishes significant differences in the extent to which exporting obstacles discourage export engagement amongst varied groups of domestic firms considered in terms of their export intention. It also draws a similar comparison between such groups of non-exporting firms and those already engaged in export operations. The findings are interpreted and discussed in the light of current knowledge and attention is paid towards pertinent implications for export management and future research. © 1997 Published by Elsevier Science Ltd. All rights reserved Key words--exports, implementation, interfirm comparisons, internationalization, marketing, strategy 1. INTRODUCTION THE EXPORT-LED GROWTH THESIS suggests that net expansion in a nation's exports induces several favourable outcomes in productivity performance, labour market employment levels, foreign exchange accumulation and related externalities such as industrial welfare and societal prosperity [1, 2]. Also for the individual firm, exporting benefits may also be evident in the form of product and process innovation, better utilization of capacity, skills development and generally improved business performance [3,4]. Recently, significant changes to the international trading infrastructure, in the manner of market deregulation, simplified logistical procedures and regulations, and regional trading area agreements, have resulted in the profusion of world export volume which has doubled in the last five years. Indications suggest that the value of such foreign exchange transactions is in excess of US$5 trillion per year [5] which accounts for approximately 10 percent of total world economic activity [6]. A plethora of conceptual propositions and empirical studies has been documented within the export management literature throughout the last two decades. Whilst theoretical insights have been gained from such work, under the aegis of internationalization theory [7], a lacuna 677