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5.2 Literature Review

There is no specific definition of export readiness, but previous studies take internationalization readiness to signify export readiness although internationalization activities are not necessarily done through exporting. For example, Liesch and Knight [10] stated that readiness to enter foreign market is determined by knowledge and information of the target market and also the knowledge and information on the most appropriate modes of entry. Meanwhile, Tan et al. [20] defined internationalization readiness as “a firm's preparedness and propensity to commence export activities overseas.” In general, export readiness is used to signify that a firm has the characteristics and the potential to enter international market.

Assessing export readiness is vital as studies have linked export readiness with export performance, for example, Ecel et al. [6], Eldik and Viviers [7], and Gerschewski et al. [8]. This would mean the more prepared a firm to export, the better chance to success in international market.

There are many studies that identified factors influencing export readiness of a firm. Eldik and Viviers [7] categorized readiness into four factors, namely, (1) motivational factors, (2) organizational factors, (3) target market considerations, and (4) product consideration. Motivational factors refer to the firms' long-term objec-

tive and their intention to expand over the long term by considering export market for business expansion. This motivational factor is described by Maurel [12] as the willingness and desire to export. Organizational factors refer to factors that influence firms to export which include management commitment, international business expertise and staff commitment, funding support or budget allocation to support export activities, and production capabilities. The willingness and desire as explained by Maurel [12] can be manifested into commitment by the management to allocate resources to export activities. Target market consideration is also an important factor as knowledge of specific market to enter minimizes risks of failure in international market. Product considerations refer to whether the products reach international standard. This factor considers whether the firm is capable to attend to product modification that suits international demand, versatile, possess differentiated features, and able to support after sales service. In relation to exporting, resource-based view (RBV) theory supports that success in international market is highly influenced by firm's capabilities and internal resources [12, 13, 18]. Furthermore, Doole et al. [5] emphasized that internal resources of a firm determine its operational readiness in terms of financial, production, marketing, and logistic.

Ecel et al. [6] found that the most important factor to export readiness is financial capabilities. Their study on oilseed export to China suggests that success is highly dependent on financial capability of a firm. This result is consistent with other findings that found that manufacturing SMEs from developing countries failed as a result of lack of financial capability [2, 21].

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