The Impact of SMEs’ Access to Trade Finance on Export Performance: The Moderating Role of Internal Weaknesses
The Impact of SMEs’ Access to Trade Finance on Export Performance: The Moderating Role of Internal Weaknesses

Summary/Abstract: This study investigates the relationship between Small and Medium Enterprises (SMEs)’ access to trade finance and their export performance, focusing on the moderating role of internal weaknesses. Through a cross cultural survey of 412 SMEs from emerging economies of Malaysia, Mexico and Sri Lanka, using regression analysis, and moderation analysis, the study empirically tests the relationship between access to trade finance and SMEs’ export performance and the and the impact of internal weaknesses of the SMEs themselves on this relationship. The research reveals that access to trade finance is positively correlated with export performance, but internal weaknesses significantly moderate this relationship. The study extends the theories of resource Based View and Pecking Order Theory by application in the context of trade finance and export performance. It adds to the literature by highlighting the internal barriers that prevent SMEs in developing economies from accessing trade finance. Several policy recommendations are proposed in this study including capacity-building initiatives, credit enhancement programs and fostering international trade networks. For SME entrepreneurs, this research provides actionable recommendations on improving their internal operations and financial management practices to enhance their eligibility for trade finance.

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