Firm Size, Efficiency and Exports: Empirical Evidence from South Africa‪.‬

Introduction Over the past decade many African countries have had to face up to the challenges of globalisation and internationalisation due to the increasing pace of trade liberalisation and regional integration that a number of countries have embarked on since the late 1980s. One of the objectives of trade liberalisation and regional integration of African countries was to improve the internationalisation of African manufacturing firms--especially through the growth of manufacturing exports. However, African manufacturing firms have not been very successful in penetrating world markets (see Pedersen & McCormick, 1999). One explanation may be due to manufacturing firm size, although the topic of firm size as a variable in the internationalisation of firms has not yet been adequately studied. According to Manuelli (1999: 19), "among the various factors that may influence the internationalisation pattern of a country, scarce attention has been paid, so far, to the impact of enterprise size." When one recognises that most manufacturing firms in Africa are Small and Medium-sized Entreprises (SMEs) it is appropriate to raise the question of whether MSMEs (Manufacturing Small and Medium Entreprises) in Africa are appropriately equipped to be successful in penetrating export markets. This question has become especially relevant in the light of a growing international literature extolling the virtues of exporting for SME development (1) as well as a growing number of recent studies that have recognised that a large and growing percentage of small businesses in countries such as Taiwan, Latin America, the USA and Europe (e.g., Italy) are engaging in exporting (see Olson, Gough & Bokor, 1997: 341). (2)