Export Channel Choice for SMEs: A Cognitive Perspective

Abstract

Despite decades of research on SME export channel choice, we know little about the role played by managerial mindsets. Managerial mindsets are the cognitive mental models managers rely on for processing and evaluating information and making decisions. In this paper, we develop and test the notion that, in addition to the influence of transaction cost factors, the global mindset of top managers has a significant impact on the export channels that SMEs use. We also suggest that this relation is sensitive to the level of political instability in the target market since such instability increases risk and uncertainty. A multinomial regression analysis was used to analyze the responses of a sample of 208 Chinese SMEs. The results provide support for our ideas. In this way, we contribute to a better understanding of how managerial thinking can influence the strategic choices that are made and the boundary conditions that exist when SMEs expand abroad.