Breaking into the international market: Net income and margin improvement for Spanish SMEs

Abstract

This study examines the dynamics of internationalization and globalization efforts of Spanish small and medium-sized enterprises (SMEs). The study aims to assess the number of Spanish SMEs engaged into international trade and benefits and risks (e.g., associated with the COVID-19 pandemic) such a process can bring. Empirical analysis of data from the Spanish Ministry of Industry provides an overview of the percentage of SMEs engaging in international activities, i.e., exporting their products and services. The results capture the critical differences between exporters and those companies that target only domestic customers and confirm that the number of newly established SMEs is growing. However, the number of exporters is decreasing or range at the same level. Only 5.48% of Spanish SMEs actively participate in international activities, and very few are involved in real internationalization. The results confirm the existence of economic growth for exporting companies that significantly impact regional and international efficiency, especially those who previously worked on research and market performance. The larger the exporting company, the higher its revenue. In addition, exporters are far more significant and considerably more productive than those companies that choose not to engage in exports. AcknowledgmentThis study is funded by Nebrija University.