Lietuvos smulkaus ir vidutinio verslo eksporto į Artimųjų Rytų rinkas barjerų įveikimo sprendimai ; Barriers and solutions for Lithuanian small and medium enterprises export to the middle east region

Abstract

Relevance of the topic: For the last three decades Lithuania is part of global economy affected directly by world market movements. Rapidly improving economic conditions and Gross Domestic Product growth is strongly influenced by Lithuanian export to foreign markets. Small and Medium-sized enterprises are a driving force behind competitiveness and export increase in Lithuania. SME importance in the local and national arena is undeniable, but they are still bounded by trade barriers when entering new markets. Most countries in the world are promoting export activities by various programs and initiatives but not always these actions reflect the direct needs of SMEs. Most recently Middle East region has become an attractive destination for Lithuanian export. This market is quite strong economically because of its abundant oil resources. Also, citizen living, and income standard is another aspect that is attracting businesses to consider this region for trade. Middle East region is experiencing economic growth, for these reasons it is important to foster Lithuanian SMEs export to this market. Research object: Overcoming trade barriers for the Lithuanian Small and Medium-sized enterprises operating in the market of the Middle East. Research aim: Validate the solutions of overcoming trade barriers for the Lithuanian Small and Medium enterprises operating in the Middle East market. Research objectives: 1. To examine theoretical and practical trade barrier research assumptions; 2. To develop methodology of the research; 3. To execute the study and identify trade barriers; 4. To structure the solutions to overcome trade barriers. Findings of the research: It is important to study trade barriers affecting Lithuanian Small and Medium –sized enterprises while exporting to the Middle East because this region is becoming more important in the global trade. The region is attractive for businesses because of its political stability, economic and demographic growth and vast natural resources. As the time goes on the Middle East region becomes more Westernized because of the Globalization and International Trade. This makes it easier for Lithuanian SMEs to attract partners and trade in these states. Unfortunately, Lithuanian companies are affected by various trade barriers while doing business with these countries. This study identified 11 factors that could be considered trade barriers of various strength. The most powerful barriers experienced by Lithuanian SMEs were of political origin, lack of speed with political cooperation between regions and assistance for newly decided exporters. Secondly, the Lithuanian companies imply that the competition in the region is quite hard to deal with when your company is small. Also, the research has found that insurance and goods transportation is a trade barrier of reasonable strength. Despite the political and economic trade barriers, it was found that sociocultural differences, such as language, is a strong export barrier for SMEs trading in or providing services in the Middle East.