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Barriers to Export in Emerging Markets: An Empirical Study of Mexican Exporters
Unformatted Document Text:  In an article addressing the marketing-related barriers common to emerging countries in general, Lall (1991) identified the following: lack of economies-of-scale operations on numerous fronts (production, advertising, marketing), information gaps, distance from final markets, inadequacy of local institutional support, skill gaps and untapped learning potential of the populations, lack of differentiation and brand name recognition, lack of consultants and supporting services, inappropriate quality and/or product design, inability to meet packaging, labeling, and instructional requirements, difficulty providing post-sales service, expensive technological inputs from abroad, complex or changing technologies, lack of R&D capacity, and inability to meet tight delivery schedules for exports. Other general barriers that EMs tend to face are: meeting standards with respect to sanitary and phyto-sanitary export requirements, packaging, labeling, eco-labeling, and certifications (Cattaui, 1999). In addition, unpredictable customs procedures, lack of government transparency, and overall lack of basic services in telecommunications, maritime and air transport create other barriers (Cattaui, 1999). In summary, the EM barriers that appear to be most prevalent across nations include unpredictable currency fluctuations, a lack of government commitment to providing consistent export policies and effect support, inability to attain consistent or internationally accepted quality, lack of modern production capacity and economies-to-scale, inability to offer competitive prices, and the lack of competent personnel. The lack of basic services, mentioned in various contexts in previous paragraphs, provide examples of the institutional voids which are deemed typical of EMs and for which firms should strive to compensate for by developing internal competencies (Khanna et al., 2005; Khanna and Palepu, 2006). The diversity of approaches and differing methods suggests that a universal means of segmenting firms to examine their specific barrier-related needs has not yet emerged. This is why we attempt to fill in this gap in the relevant research by developing a classification, based on the aforementioned literature review, of the main internal barriers to export, to examine them in the situation of Mexico, particularly for non-commodity producers, to derive more general lessons for export barriers in EMs. Highlights of Mexico’s economic past provide a context for the interpretation of the findings of this empirical study. Mexico economic background Export trade has become the central pillar of the contemporary Mexican economic agenda, as it has for other emerging nations since the trend toward globalization in the late 1980s and early 1990s. In terms of export volume, as of 2007, Mexico stands as the U.S.’ third largest supplier after Canada and China 1 (US Census Bureau, 2008). Compared to other nations, Mexico ranked 10 th in export volume among OECD members and its exports exceed those of Australia, South 1 http://www.census.gov/foreign-trade/statistics/highlights/top/top0712.html#imports 6

Authors: Johnson, Robyn. and Duhamel, Francois.
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In an article addressing the marketing-related barriers common to emerging countries in general, Lall (1991) identified the 
following: lack of economies-of-scale operations  on numerous fronts (production, advertising, marketing), information 
gaps, distance from final markets, inadequacy of local institutional support, skill gaps and untapped learning potential of the 
populations, lack of differentiation and brand name recognition, lack of consultants and supporting services, inappropriate 
quality and/or product design, inability to meet packaging, labeling, and instructional requirements, difficulty providing 
post-sales service, expensive technological inputs from abroad, complex or changing technologies, lack of R&D capacity, 
and inability to meet tight delivery schedules for exports.   Other general  barriers  that EMs tend to face are: meeting 
standards   with   respect   to   sanitary   and   phyto-sanitary   export   requirements,   packaging,   labeling,   eco-labeling,   and 
certifications (Cattaui, 1999). In addition, unpredictable customs procedures, lack of government transparency, and overall 
lack of basic services in telecommunications, maritime and air transport create other barriers (Cattaui, 1999).  
In summary, the EM barriers that appear to be most prevalent across nations include unpredictable currency fluctuations, a 
lack of government commitment to providing consistent export policies and effect support, inability to attain consistent or 
internationally accepted quality, lack of modern production capacity and economies-to-scale, inability to offer competitive 
prices,   and   the   lack   of   competent   personnel.   The   lack   of   basic   services,   mentioned   in   various   contexts   in   previous 
paragraphs, provide examples of the institutional voids which are deemed typical of EMs and for which firms should strive 
to compensate for by developing internal competencies (Khanna et al., 2005; Khanna and Palepu, 2006).
The diversity of approaches and differing methods suggests that a universal means of segmenting firms to examine their 
specific barrier-related needs has not yet emerged. This is why we attempt to fill in this gap in the relevant research by 
developing  a classification,  based on the  aforementioned  literature  review,  of  the  main internal  barriers  to export,  to 
examine them in the situation of Mexico, particularly for non-commodity producers, to derive more general lessons for 
export barriers in EMs. Highlights of Mexico’s economic past provide a context for the interpretation of the findings of this 
empirical study.
Mexico economic  background
Export trade has become the central pillar of the contemporary Mexican economic agenda, as it has for other emerging 
nations since the trend toward globalization in the late 1980s   and early 1990s. In terms of export volume, as of 2007, 
Mexico stands as the U.S.’ third largest supplier after Canada and China
 (US Census Bureau, 2008). Compared to other 
nations, Mexico ranked 10
th
  in export volume among OECD members and its exports exceed those of Australia, South 
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