Growing Pains: New Zealand Qualitative Evidence on Hurdles to Exporting Growth

Geoff Simmons ()
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Geoff Simmons: The Treasury, https://treasury.govt.nz/

No 02/10, Treasury Working Paper Series from New Zealand Treasury

Abstract: This paper surveys qualitative evidence with the aim of identifying consistent issues surrounding the growth of New Zealand firms. The available literature is focussed on exporters and raises the possibility of two “hurdles” to growth for New Zealand firms. The first is the fixed-cost hurdle to entering exporting. The second is the hurdle of establishing the offshore distribution channels required for continued growth. While the evidence for these hurdles is far from conclusive, their existence is consistent with many of the available case studies. The hurdle to ongoing growth may explain why so many promising New Zealand companies are sold to foreign firms in the same industry. Overseas ownership by a firm in the same industry often solves the distribution problems of many small New Zealand firms and allows growth to continue. The outcome of overseas ownership is therefore not necessarily bad for New Zealand. The case study evidence suggests many plausible causes of these hurdles. These include New Zealand’s small market size and distant location and the fluctuating exchange rate. While the evidence on capital markets is mixed, case studies suggest a possible lack of specialised expertise on the part of New Zealand’s small venture capital industry may also be a hurdle to growth.

Keywords: Patterns of Firm Growth; Exporting (search for similar items in EconPapers)
JEL-codes: D21 F14 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2002-06
New Economics Papers: this item is included in nep-ent
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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