Export behaviour of smaller Norwegian firms: Measuring the effects of state subsidies

Lack of resources, lack of international marketing knowledge, and severe competition are some of the difficulties facing smaller Norwegian firms in exporting. In 1986, when both oil prices and value of the US dollar fell, Norway faced great problems in balance of payment and decided to encourage small- and medium-sized firms to export. To acheive this, the Norwegian Export Council granted rather liberal export subsidies. The behavior of these smaller firms towards export marketing and state subsidies, especially the role of the export council, is investigated. There are some 2,089 small- and medium-sized exporting firms (with less than 500 employees) in Norway. Questionnaires were sent to 600 firms, and findings are presented based on a response rate of 65%. It is revealed that the medium-sized firms (with 200-499 employees) were quite active in export, deriving more than 75% of their turnover from exports. Higher production cost was considered to be the main problem by 43% of respondents. The possibility of measuring the effects of state subsidies is also discussed, and a conceptual model for this measurement is presented.