[Abstract]
This study empirically analyzes the performance of large company¡¯s win-win export assistance programs for small and medium suppliers, especially in the absence of microeconomic studies on the determinants of SMEs¡¯ exports in Korean Academic circles.
From the interviews with the owners of small and medium-size suppliers, it is found that there is a ¡®Death Valley of Globalization'. SMEs¡¯ globalization proceeds gradually through the stages of curiosity, frustration, hesitation, enthusiasm, and success.
This paper shows using technical analysis that large corporations can effectively promote globalization of small and medium-size suppliers by customizing export promotion program to take into account both the size and capability of the suppliers.
The empirical analysis tests the hypothesis that utilization of the program (measured as a percentage of total program actually used by the suppliers) is inversely related to the export-to-sales ratio. The hypothesis was statistically rejected, but the sign of the coefficient was consistent with the hypothesis.
Technical and empirical analysis together implies that large company¡¯s assistance programs have to be tailored to fit suppliers¡¯ own globalization stage. The government¡¯s policy for SME globalization should also be changed to consider the capabilities of individual SMEs. When government and big company¡¯s tailored assistance programs are well compatible with their development stages, SMEs are more likely to utilize them to challenge globalization, and achieve more successful results.